The Washington State Investment Board, Olympia, will index its $2.1 billion in active domestic equity and terminate six managers, said James Parker, executive director of the $36.9 billion fund. Existing passive manager Barclays Global Investors will get the entire $2.1 billion, bringing its total equity allocation to $12.4 billion.
Terminated were enhanced index managers Advanced Investment Management, Independence Investment and PIMCO, and small- to midcap equity managers Chancellor LGT, Denver Investment and Wilke/Thompson. The actual transfer of assets will occur over the next two months.
Separately, officials also terminated UBS as international equity manager due to poor performance. Calls to the UBS office in New York were referred to London officials, who could not be reached for comment. The board has yet to decide whether to hire a manager to run UBS' $339 million or leave it permanently in State Street Global Advisor's European Equity Index fund.
Also, the fund committed $100 million to the Gilbert Global Equity Fund and $45 million to the Charter House Fund VI. Brinson assisted with the hiring of Charter House. Assets came from cash.
State Street Global Advisors today announced it will form a new London-based emerging markets money management firm led by Ken King, formerly head of emerging markets at Kleinwort Benson Investment Management Ltd. Mr. King will be joined by seven other members of the KBIM emerging markets team, which runs nearly $2 billion in assets. Subject to regulatory approval, the new firm will be called King Street Advisors Ltd., and will be 75% owned by State Street. The new firm, which is expected to be operating by midyear, will be part of SSgA Global Alliance, a unit started this year to build new businesses in non-traditional investments. King Street is the second firm to be created by SSgA; a Hong Kong-based Asian manager is in the works.
Officials at KBIM, now branded as Dresdner RCM Global Investors, said Mr. King left because he was not comfortable with a plan to enhance country and stock selection in the emerging markets product.
The California Public Employees' Retirement System's investment committee is studying whether to have representation on corporate boards. The study was prompted by an investment committee request for a policy on whether and how the $110 billion Sacramento-based fund will be involved in the corporate director selection process.
The study will look at whether CalPERS would have conflicting fiduciary duties and liability if it became involved in the selection process. No completion date on the study has been set.
The PBGC took over the Michigan Health Care Corp. pension plan, which is underfunded by about $11 million. The plan has $21 million in assets and $32 million in liabilities. The Detroit-based company filed for Chapter 11 in March 1995 and sold its assets in April 1997.
Most participants are expected to receive the same benefits, the agency said.
The Indiana Public Employees' Retirement Fund, Indianapolis, is likely to move $300 million into an S&P 500 index fund this week, said Garth Dickey, executive director.
A November referendum gave the $7 billion fund the go-ahead to invest in equities and fund officials then sought some legislative changes to state law before taking the plunge. Those changes have been passed by the Legislature and signed by the governor.
Mr. Dickey said that once the initial $300 million is invested, with ANB Investment Management, another $100 million per month will be moved into the fund.
At some point, fund officials will be considering active management, although a time frame hasn't been established, he said.
An employer-sponsored 401(k) plan was the second most popular employee benefit in a survey of workers released today by Fidelity Investments.
Seventy-six percent of the respondents ranked it as one of the top three benefits. Medical and health insurance was ranked by 94% in the survey.
Dental insurance was the third most popular benefit.
