The Federal Reserve Board Open Markets Committee left short-term interest rates unchanged following its meeting today.
Economists had been divided in their feelings on whether the Fed would adjust rates. Patricia Klink, CIO at Advisors Capital Management, noted the committee may have postponed action until its July 1 meeting, when more economic data will be available.
Travelers Group will grant stock options to all employees outside of its 401(k) plan if the company doesn't receive government approval to contribute options to the plan. A Travelers spokesman said the company will proceed with a plan to issue stock options to all employees equal to 10% of compensation with a $40,000 compensation cap.
The IRS is reconsidering its earlier ruling that would have cleared the way for Travelers to become the first company to contribute stock options to its 401(k). The Labor Department also delayed approving Travelers' application for a prohibited transaction exemption.
California Public Employees' Retirement System trustees approved an RFP Monday for a small-cap passive U.S. equity manager. The RFP is expected to be posted on the Internet around June 18. Dimensional Fund Advisors is now the $110 billion Sacramento fund's passive small-cap manager, running about $1.2 billion. A selection is expected in January 1998.
The board also delayed the selection of an alternative investment management consultant so additional performance data can be analyzed. A selection is expected in late June.
The volume of reported defined benefit hirings increased last year to 1,306 money manager placements, representing $82.992 billion, compared with 1,220 placements representing $52.454 billion of assignments in 1995, according to the Tracker service of Eager & Associates. Active equities accounted for 39% of all placements and 24% by dollars invested. Within that category, small-cap equity assignments continued to be the most popular U.S. active equity style. Small-cap accounted for 38% of active equities hires by number and 29% by dollars invested.
The number of defined contribution placements declined last year largely because of changes in the way the hirings are reported, but the dollar investments awarded in searches nearly doubled to more than $26.9 billion.
University & Community College System of Nevada, Reno, may search for additional managers to diversify its $180 million endowment's portfolio, said Tim Ortez, director of banking and investments. Trustees will meet Wednesday to discuss asset allocation changes and decide whether to begin a search. In the past, REITs, hedge funds and alternative investments have been considered as possibilities to enhance the fund's current allocation of 70% stocks and 30% bonds.
Rep. Rick White, R-Wash., and Rep. Anna Eshoo, D-Calif., are expected to introduce legislation Wednesday that would ensure federal laws override state laws in securities class-action lawsuits. While the number of securities lawsuits filed in federal courts dropped 20% since the December 1995 enactment of the Private Securities Litigation Reform Act, suits filed in state courts have risen 50%, said Lewis Roth, an aide to Ms. Eshoo, quoting data from a Stanford University study.
USF&G Corp. and the Teachers Insurance and Annuity Association formed Light Street Partners, a real estate investment partnership with $164.5 million in assets. USF&G Realty Advisors, USF&G's real estate affiliate, is managing the partnership.