Federated Investors reached agreement to acquire seven retail mutual funds with $600 million in assets from The William Penn Co. Terms were not disclosed. The deal is expected to close during the second quarter.
The Penn Square Mutual, Scottish Widows International, William Penn Pennsylvania Tax Free, William Penn New York Tax Free Income, William Penn Quality Income, William Penn U.S. Government Securities Income and William Penn Money Market Income Funds will be merged into their equivalent Federated funds, pending shareholder approval.
President Clinton today announced the PBGC had an $869 million surplus in its single-employer insurance program for 1996, the first surplus ever in that program.
Increased insurance premium revenue from underfunded plans, investment gains and a lack of major plan terminations all contributed to the surplus. In its annual report released at a White House news conference, the agency reported investment income totaled $900 million, while premium income totaled more than $1.1 billion. For 1996, the single-employer program had $12 billion in assets and $11.2 billion in liabilities.
At the same news conference, the Labor Department reported that as a result of its crackdown on 401(k) plan abuses, nearly $22 million has been recovered for 40,800 workers. President Clinton announced a toll-free hotline workers could call to get more information to help them understand their pension rights.
Bankers Trust's global investment management unit stemmed the flow of red ink that had afflicted it for the last two years. In its annual report, the company reported $13 million in net income and revenue of $300 million for its investment management operations in 1996, compared with a loss of $10 million and $265 million of revenue in 1995 and a $30 million loss and revenue of $247 million in 1994.
Total investment management assets rose to $201 billion in 1996 from $175 billion the previous year, with 65% of new assets coming from existing clients. The report credits most growth on strong sales of index and specialty money management products. Index products alone made up $110 billion of total assets and $10 billion of the new assets acquired in 1996.
Dun & Bradstreet will report tomorrow that U.S. executives expect economic growth in the second quarter to be the strongest in more than two years. D&B's survey of 3,000 business executives found robust growth is expected throughout the economy; nearly every industry tracked predicted increased sales and profits through the end of June. Executives expect prices and employment levels to rise more quickly during the period.
Among all firms surveyed, 69% expect net sales to increase during the period vs. 64% in the prior survey. Sixty-two percent expect higher net profits, compared with 56% in the first quarter. The number of firms expecting to increase selling prices rose to 41% of all companies surveyed, up from 37%.
The Independent Association of Publishers' Employees, Princeton Junction, N.J., submitted a resolution asking the non-employee directors of Dow Jones & Co. to develop objective criteria for evaluating the performance of the company's top executive and to use those for annual performance reviews and compensation recommendations. The association is the largest union representing Dow Jones employees, representing 2,500 of the company's workers. The company's annual shareholder meeting is April 16.
Dow Jones opposes the shareholders' proposal, a statement in the company's proxy mailed to shareholders said.
Lincoln Capital Management will add a stand-alone high-yield product within the next three months, said Alec Knowles, spokesman. In addition, the firm has hired Ann Benjamin as vice president of fixed-income management, a new position. Ms. Benjamin comes from Stein Roe & Farnham, where she managed Stein Roe's Income Fund. She has been replaced internally by Steve Lochman.
BARRA and Prebon Yamane joined forces to offer a computer-based forward rate agreement crossing system called POSIT-FRA. The system is designed to offer FRA and interest rate swap investors a confidential way to execute FRA transactions in a crossing system environment, said Harry A. Fry, deputy managing director for Prebon Yamane.
BARRA designed the software, with consultation from Prebone Yamane, an institutional fixed-income broker.
