The 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 currently charged, Mr. Herndon said. Barring some kind of industrywide change, the Florida board felt it had to use commission recapture to help lower commission costs, he said.
Rep. Chaka Fattah, D-Pa., asked the IRS to explain why tax rules might prevent Conrail Inc.'s employees from collecting their share of a windfall resulting from the company's acquisition by CSX Corp. The windfall will be generated because CSX is buying out Conrail shareholders at $115 a share, while Conrail's employee stock ownership plan acquired the stock around $28 each. In a letter to the IRS, Mr. Fattah asked the agency to respond to his concern ``to ascertain if an IRS position is keeping Conrail employees from obtaining their money.'' The IRS has not yet responded, said Neil Snyder, a legislative aide.
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 the No. 1 U.S. mutual fund company. A net $3.5 billion was pulled from Magellan in the first five months of 1997, coupled with an estimated $5.7 billion that was withdrawn from Magellan last year. Fidelity reported last week that Magellan suffered net outflows in May, although 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.
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%. The Legislature adjourned without passing the bill. Jim Kelly, director-communications, said the $19 billion fund probably will seek similar authorization next year. The fund's current allocation is now 50%.
Radnor Capital Management is launching new core value and enhanced index fixed-income products. Craig A. Moyer, former senior investment manager at Meridian Investment, will become vice president and lead portfolio manager for the new products, which will focus on relative value. The firm has so far managed only equity or balanced portfolios. The products have yet to be funded.
At Meridian, Mr. Moyer has been replaced internally by Bill T. Lawrence.