Florida State Board of Administration, Tallahassee, will implement a commission recapture program in about 45 days, said Tom Herndon, executive director for the $62 billion fund. Officials for the fund were concerned they were missing opportunities by not participating in commission recapture, given the way brokerage commissions are now charged, Mr. Herndon said. Barring some kind of industrywide change, board members felt they had to use commission recapture to help lower commission costs, he said.
California State Teachers' Retirement System staff is recommending a reduction in the number of real estate services to be handled by the $68 billion fund's new real estate consultant. The staff is recommending staff, rather than the consultant, handle development of policy and procedures for real estate acquisition, management and disposition. The staff also wants an independent fiduciary, not the consultant, to recommend specific real estate transactions and real estate funds.
The staff plans to issue an RFP for a real estate consultant soon to replace Institutional Property Consultants, which resigned in April. The CalSTRS board is expected to vote on the recommendations this week.
Alaska Permanent Fund, Juneau, failed to win passage of legislation to allow it to invest up to 60% of its assets in equities, up from 50% now. The Legislature adjourned without passing the bill. Jim Kelly, director-communications, said the fund probably will seek similar authorization next year. The $19 billion fund's current allocation is at 50%.
Fidelity's flagship Magellan fund suffered $485 million in net outflows in May, the 11th straight month in which money flowed out, said analysts who track Fidelity. A net $3.5 billion was pulled from Magellan in the first five months of 1997, coupled with an estimated $5.7 billion withdrawn from Magellan last year. Fidelity reported last week that Magellan suffered net outflows in May, but redemptions were at the lowest levels of the past year.
The $56 billion fund reported a 5.29% investment return in May and was up 11.29% this year through May. The S&P 500 index was up about 14% through May.