California Public Employees' Retirement System's trustees have approved an incentive pay plan that could raise the total compensation for the fund's CIO to as high as $437,500.
The current salary range for the CIO is $185,000 to $250,000 with no incentive. Under the new plan, the CIO's pay could reach $323,750 to $437,500, including incentives. The plan for the CEO at Sacramento-based CalPERS calls for a base pay of $110,000 to $140,000 with an incentive bonus of $143,000 to $182,000.
California State Controller Kathleen Connell is calling the increases ``offensive.'' She said the plan could make the CalPERS CIO the highest paid public employee in the country. However, Chuck Valdes, chairman of CalPERS' investment committee, said the pay-plan increases are needed to compete for investment talent in the private sector.
State of Michigan Retirement Systems, Lansing, made its first direct investment in a public REIT, buying a $35 million limited partnership interest Home Properties of New York. Home Properties specializes in apartments for older people. The $35 billion system's investment is in convertible debt, which if converted, would give the fund an 18% stake in Home Properties, said Philip Van Syckle, administrator for mortgage and real estate.
The security pays 9.25% for two years and 9% for three years. Michigan's previous REIT investments were made by purchasing shares in the open market.
The University of New Mexico endowment, Albuquerque, plans to increase its international allocation by the end of the year as a result of an asset allocation study. C.W. Vickers, endowment manager, said the fund will boost international equities to 20% of total assets from the current 10%.
The increase will go to Scudder, Stevens & Clark, which runs the international portfolio now. The $140 million fund will decrease its bond allocation to 30% from 40%. Loomis Sayles and Fiduciary Trust will split the reduction and continue to divide evenly the fund's bond management. Mercer Investment Consulting is assisting.
U.S. equity mutual funds recovered from a first-quarter stumble and are charging ahead, the latest data from Lipper Analytical show. The average general equity fund was up 13.7% in the second quarter through June 16. S&P 500 index funds were still the leading investment category with a 17% average return for the period. Financial services funds were the best performing sector in the period with a 15.9% average return and the best over one year with a 42.6% average return.
World equity returned funds 8.1% average return so far in the second quarter. Japan funds showed a 19.3% average return in the quarter so far. Latin American equity funds, had a 15.7% average return. Japan-only funds still remained down for the year to date, however, with an average -5.1% return.
Kirkland & Ellis is doing a ``casual search'' for a record keeper for its 401(k) plan. The plan now uses Epaco and Vanguard as record keepers. The law firm hopes to decide on one record keeper and is including Epaco and Vanguard in the search, said Douglas McLemore, firm administrator.
DiMeo Schneider is conducting the search. The plan has $53.7 million in assets, according to the 1997 Money Market Directory.
University of Cincinnati increased assignments of two managers, said William Doering, director-cash management for the $376 million endowment fund. It allocated an additional $5 million each to a Common Fund international equities portfolio, bringing it to $50 million, and to a Johnson Investment Counsel U.S. bond portfolio, bringing it to $87 million. Funding came from cash flow. Fund Evaluation Group assisted.
