VEVEY, Switzerland - Nestle SA's pension fund will pick managers to run 7% of its 5 billion Swiss franc ($3.4 billion) in assets in private equities and hedge funds in the second half of the year.
Jean-Pierre Steiner, vice president and corporate pension director for the fund, said an asset/liability study concluded four months ago recommended increasing alternative investments to 14% from 1% to 2%. The fund already has invested half that allocation in emerging markets equities, but he declined to name the managers. The remaining 350 million franc allocation will be split among venture capital, mostly in the United States; U.S., Asian and European private equities; and hedge funds.
Buck Consultants conducted the study. The new asset mix is 51% equities, 20% bonds, 15% real estate and 14% alternatives.
AFP Provida invests
in 3 non-Chilean funds
SANTIAGO, Chile - Administradora de Fondos de Pensiones Provida SA, a pension fund administration firm, has selected three non-Chilean equity mutual funds.
They are: State Street Global Advisors' SSgA Emerging Markets Fund, in which it has made a $2.5 million investment in it; an Asian fund of Morgan Stanley, in which it has invested $2.5 million; and an emerging markets equity fund of INVESCO, in which the AFP put about $3 million.
Provida, which manages the equivalent of $6 billion, is the largest AFP in Latin America.
Style analysis research
covers 16 equity markets
LONDON - Style Investment Research Associates Ltd., London, introduced an international style analysis research product to help investment professionals identify style trends in 16 equity markets.
Analyzing style on a historical basis reveals "how durable those trends have been in the past," explained Robert Schwob, chief executive and founder of the firm and formerly chief executive officer of Quorum Capital Management Ltd., where he had helped develop a style analysis product.
For example, the research reveals that while value is not well rewarded over the medium term in Switzerland, gains can be made from earnings yield and cash flow yield over the short to medium term. The Global Style Advisor uses monthly pricing and fundamental data on 6,000 securities in 16 equity markets.
Three U.K. money managers and one internally managed British pension fund have committed to purchase the product, he said. He couldn't yet release the names.
RCP expands system
to hedge, European firms
GENEVA - RCP & Partners plans to extend its money manager rating system to European managers and hedge fund managers.
The financial adviser, with offices in Geneva and Hong Kong, has been rating more than 200 Asian fund managers for the past two years. Its reports, which are updated monthly, provide a "fiduciary rating" for each manager covered, looking at both the business management and investment management practices.
Business management ratings range from AAA to B and include such issues as corporate structure, pay policy, back-office systems, profiles of each director and leading portfolio manager, as well as a review of potential conflicts of interests and compliance practices.
Investment management provides ratings looking at investment process and discipline, country and securities selection, portfolio turnover, and research. Performance data from The WM Co., Edinburgh, is used for the Asian managers. Discussions are continuing whether WM will provide data for the European manager universe.
Robert Pouliot, managing partner based in RCP's Geneva office, acknowledged there is less demand for such a product in Europe's consultant-driven markets. But Mr. Pouliot noted some consultants have their own conflicts, by having affiliated brokerage arms or offering fund-of-funds products.
He said emergence of a single European currency will make continental European managers more vulnerable to international competition. To compete effectively against U.K. investment houses, European managers will have to establish their credibility, he said.
Colin Kay, a WM director in charge of the firm's non-U.K. business, said there is greater demand for such a product in Asia, which is still new to performance measurement and money management processes are less transparent.
World Index posts gain;
emerging markets down
Aided by the U.S. market's performance last month, the MSCI World index climbed 3.1% in dollar terms vs. a 0.4% gain for the EAFE index.
The MSCI Emerging Markets Free index fell 0.2%.
Among developed markets, the three top performers for the month of April were the United States, 6.4%; Spain, 5.7%; and Japan, 3.6%. Laggards were Malaysia -11.3%; Sweden, -8.5%; and Singapore, -5.4%.
Among emerging markets, China's domestic free market shot up 22.2% in dollar terms, while Sri Lanka rose 15.4%.
In keeping with the generally weak showing of Southeast Asian markets, the Philippines free index fell 17%.