CONRAIL ESOP DECISION
Conrail ESOP participants will have to wait until the end of 1998 to collect their entire share of the $500 million windfall from the company's acquisition by CSX and Norfolk Southern.
Workers who lose their jobs this year as part of the merger might never get all of the money, because only employees on the rolls in 1998 will be eligible to collect next year's payout.
And employees will have to forgo contributing to their 401(k) plan in 1997 and 1998.
GMG/Seneca stake acquired
Phoenix Duff & Phelps agreed to acquire a majority stake in GMG/Seneca Capital Management. The deal valued GMG/Seneca at $54 million; Phoenix Duff & Phelps would not disclose the size of the equity stake it acquired.
Asset review likely
Both the $4.2 billion Chicago Municipal Employees' Annuity Benefit Fund and the $1.2 billion Chicago Laborers' Annuity & Benefit Fund probably will review their respective asset allocations following legislative changes, and continue to look closely at adding managed futures to their portfolios.
The state Legislature recently passed a bill that would allow the funds to adopt a prudent investor rule, said James Stack, executive director for the Municipal fund. Gov. Jim Edgar is expected to sign the bill.
Also, board members from both funds agreed to a joint meeting with both RXR, a futures manager, and Baldwin, a manager of futures managers.
REIT allocation boosted
The $7.3 billion Public School Teachers' Pension & Retirement Fund of Chicago will allocate 2%of assets to public REITs, boosting the overall allocation to real estate to 7% One percent will come from large-cap core equity and 1%from core fixed income.
PSE&G hires 3
The $1.7 billion Public Service Electric & Gas pension fund hired three small-cap managers.
RCM Capital received $50 million; Rosenberg Institutional, $80 million; and Reich & Tang, $30 million. Assets will come from three active large-cap managers who were terminated.
Fred Saunders, assistant treasurer, would not say which managers were dropped.
The fund also hired State Street Global Advisors and W.R. Huff for its $350 million nuclear decommissioning trust. State Street will handle 10% in international equities and 20% in U.S. small-cap equities, while Huff will run 10% in high yield fixed income. Assets came from restructuring and termination of two unidentified managers.
Paradigm names CIO
Thomas K. Philips was named CIO of Paradigm Asset Management, a new position. He had been managing director of advanced research with Symphony Asset Management.
Paradigm also hired Russ Ewing, formerly an active international portfolio managers with State Street Global Advisors, as portfolio manager.
Virginia mulls fee change
Virginia Retirement System is considering using performance-based fees for some outside money managers, said Nancy Everett, deputy CIO for the $25.9 billion fund.
Spokane changes focus
The $140 million Spokane Employees' Retirement System hired five U.S. equity managers following a decision to drop balanced management.
Hired were: John A. Levin & Co. and Spears Benzak Salomon & Farrell for $10 million each in value equity; Bank of New York for $15 million in an S&P 500 index fund; Frank Russell for $10 million in a large-cap fund-of-funds; and ICM Asset Management for $12 million in small-cap equity. Merrill Lynch assisted.
Officials terminated all but one balanced manager, Olympic Capital, which will run part of the fund's 40%bond allocation. Most of the bonds will be managed internally.
Worcester mulls cutback
The $233 million Worcester Retirement System might cut a bond manager, said James A. DelSignore, city auditor and trustee.
The system would retain its 32%allocation to fixed income, but would eliminate one of four bond managers: Putnam, which runs international; Loomis Sayles, high yield and conservative; State Street Research, mainly Treasuries; and Babson, mainly mortgage-backed securities and corporate bonds.
Dahab Associates is assisting.
2 managers merge
Chinook Capital, an equity manager and Seattle Capital Management, a bond manager, merged to form a new firm, Chinook Capital Management. Terms of the deal were not disclosed.
Prior to the merger, Chinook had $50 million under management, and Seattle Capital managed $400 million.
Manus joins DFA
Stephen P. Manus joined Dimensional Fund Advisors as vice president responsible for consultant relations, a new position. Mr. Manus left in February as president of ANB Investment Management.
New German firm opens
Bank Julius Baer opened a Frankfurt-based money management arm to expand services to the evolving German pension fund market. Julius Baer Kapitalanage AG specializes in management of securities for domestic and foreign institutional investors.
It is headed by Harald Fuchs and Kurt Ochner, both of whom had been at Julius Baer Capital GmbH.
Los Angeles taps Paradigm
The $6.1 billion Los Angeles City Employees' Retirement System hired Paradigm Asset Management to manage $225 million in enhanced large-cap value equities, said CIO Daniel P. Gallagher. Paradigm was funded with cash flow; Asset Strategy Consulting assisted.
Allegheny County hires
The $540 million Allegheny County Retirement Board hired Sasco Capital for a $37 million large-cap domestic equity portfolio, said Cheryl A. Bateman, executive director. Assets will come from a reallocation. Kalson & Associates assisted.
G.T. fund now open-end
G.T. Global Developing Markets Fund trustees approved a change to an open-end structure for the $545 million fund. The fund was the subject of a takeover attempt last month by some former members of its management team who moved to CapMAC Inc.
Shipping association hires
The Hampton Roads Shipping Association-International Longshoremen's Association hired three firms to run a total of $124 million for its $450 million pension fund: Legg Mason and Woodford Gayed for U.S. equities, and Edgar Lomax to run a balanced portfolio. (Hughes Capital Management, a fixed-income firm, will be a subadviser to Lomax.)
Assets come from WR Lazard and TPK Asset Management, both of which were terminated.
Port Authority enters REITs
The $620 million fund of the Port Authority of Allegheny County hired INVESCO for its first move to REITs, said James Shearer, program manager. INVESCO will get $15.5 million. Assets come from a reallocation. Yanni-Bilkey assisted.
Grivas leaves Spare Kaplan
Susan L. Grivas joined Newport Pacific Management as director of institutional marketing, a new position. She had been a principal at Spare, Kaplan & Bischel.
CalPERS airs performance
CalPERS reported its annualized investment performance for periods ended March 31. The returns were 11%for one year, 13%for three years and 11.8%for five years. TUCS median annualized returns for large public funds during the same periods were 11.1%for the year, 13.1%for three years and 11.5%for five years