Public Schools Retirement System of Missouri, Jefferson City, terminated Boatmen's Trust because the fixed-income team departed to start Rockwood Capital Advisers. The $14.5 billion fund issued RFIs seeking a manager to handle the $1.6 billion in domestic fixed income benchmarked to the Lehman Brothers Government/Corporate Bond Index Boatmen's had managed. The assets were placed temporarily in passive portfolios with State Street Global.
Responses are due next week and a selection is expected after the trustees' meeting in June, said CIO Mark Caplinger. Strategic Investment Solutions is assisting. No other searches are planned.
Also, M. Steve Yoakum, executive director of the fund, left to become CEO of Rockwood, which received SEC registration approval yesterday. He has not yet been replaced.
Tucson Supplemental Retirement System terminated Driehaus Capital Management for a $13 million small-cap equity portfolio because of poor performance, said Michael Parisi, treasury administrator for the $300 million fund. He said trustees had become concerned about the firm's lack of responsiveness to its questions, noting they had been unable to arrange a meeting with CEO Richard Driehaus, who ran the portfolio.
Driehaus' performance has suffered because its momentum style is out of favor, said Bob Buchen, the firm's vice president of marketing. Scheduling time away from his portfolio management responsibilities is too difficult for Mr. Driehaus when the stock market is as volatile as it is now, said Mr. Buchen.
The assets were placed temporarily with Alliance Capital in a passive portfolio, where it will remain pending an asset allocation review in the third quarter. The fund expects to hire a new consultant in June.
BPI Financial, a Canadian mutual fund company with $3 billion (U.S.) in assets, opened a U.S. subsidiary dedicated to institutional money management. BPI Global Asset Management has $600 million in subadvisory assets for six BPI mutual funds. The firm will manage U.S. and international equities for U.S. institutions, and global equity portfolios, including U.S. equity, for Canadian institutions.
The MSCI EAFE index (without dividends) fell 2% in U.S. dollar terms in the first quarter, while the MSCI World Index dropped 0.1%. For March, the EAFE inched up 0.2%, while the World Index fell 2.1%. MSCI's Europe index climbed 4.4%, while its Far East index fell 10.8%. Germany's market was the highest of developed countries with an 11% rise. Japan trailed with -12%. The MSCI Emerging Markets Free index gained 8%. Turkey's market led with a 47.4% jump, while Thailand's was last at -15.2%. In March, MSCI's Emerging Markets Free index fell 2.9%.
J.P. Morgan teamed up with Bank of America, BZW, Deutsche Morgan Grenfell, Swiss Bank, UBS and KMV Corp., a credit analysis firm, to launch a tool for measuring credit risk. Called CreditMetrics, the software evaluates the credit risk of securities individually or across an entire portfolio. It is intended to be a benchmark for portfolio managers using a variety of debt instruments.