Sen. Barbara Boxer's legislation limiting 401(k) plan investments in employer stock didn't make it into the budget package drafted by the House and Senate tax-writing committees, but might still be attached to the budget legislati on as an amendment said Ann L. Combs, principal with William M. Mercer.
If the provision is narrowly crafted, the chances are it will pass, she predicts.
State Street Bank today announced a 50/50 joint venture with Mansion House Gr oup of Hong Kong to provide asset management and mutual fund services in Hong Kong, China and the region.
Nicholas A. Lopardo, chairman and CEO of State Street Global Advisors, will be chairman of the new firm, called State Street Mansion House Investment Management Services. Evans C. Lowe, chairman and CEO of Mansion House Group, will be vice chairman.
Mansion House is active in stock brokerage, asset management and direct investment in China. Mansion Hous e will provide investment and administrative services.
New York Common Retirement Fund, Albany, paid $32 million for First Union Plaza, the largest single office property transaction in the Raleigh/Durham/Chapel Hill, N.C., area, a ccording to Marcus & Millichap Commercial Real Estate Investment Brokerage. The $88 billion pension fund paid more than $136 per square foot for the 235,000-square-foot building. The fund was represented by Jones Lang Wootton Realty Advisors.
Avatar Associates moved its equity allocation to 80% stocks and is planning to raise it to 85% soon for its equity-cash TAA portfolios, said Edward S. Babbitt Jr., president. Avatar, which runs $2.6 billion in its equit y-cash TAA strategy, had the allocation at 50% equities in mid-April and 70% equities in late May. In its equity-bonds-cash TAA portfolios, for which it runs $1.5 billion, it is at 65% equities, 30% bonds and 5% cash. In April, that strategy was 30% equities. Mr. Babbitt said rising interest rates would likely cause its model to reduce the equity positions.
A study by two Federal Reserve Bank of Cleveland economists says Social Security can be privatized wit hout raising taxes or cutting benefits but it must occur soon.
David Altig, vice president and economist, and Jagadeesh Gokhale, economic adviser, in a study released by the Cato Institute, would allow workers under 32 to divert up to 46% of their payroll taxes to privately invested accounts. The rest of their payroll tax would provide Social Security benefits to retirees or those who will retire soon. Assuming investment returns below historic averages, the y say individuals in the privatized system would get retirement benefits equal to or greater than those now promised under Social Security.
Ferris State University and the Ferris Foundation, Big Rapids, Mich., hired Fund Evaluation Group as its first investment consultant, a university spokeswoman said. Fund Evaluation Group is in the initial stages of studying the endowment's asset allocation, investment guidelines and procedures for selecting and monitorin g money managers, said Christopher Meyer, vice president. The endowment has about $9 million, according to The Money Market Directory.
Virginia Tech Foundation, Blacksburg, Va., committed $12 million to a REIT managed by Cohen & Steers.
The $450 million foundation also terminated international small-cap manager Rowe Price-Fleming because fund executives believe the international small-cap equity market is underperforming. They plan on moving the $18 million portfolio to Templeton for large-cap international equity; Templeton already manages $21 million. Funding for the REIT will come from cash and from domestic large- and midcap equity managers; it will bring the fund's real estate al location to 5% of total assets.
Also, fund executives are narrowing a list of domestic small-cap equity managers to handle 10% of assets. Final presentations are expected in mid-November.
Fish & Richardson P.C., Houston, hired Amer ican Century as bundled service provider for its $25 million 401(k) plan. American Century will provide record keeping, communications and 12 investment funds. The plan also will offer self-directed brokerage through Charles Schwab . Fund officials declined to name the previous service providers.
CORRECTION: P&I Daily incorrectly reported June 20 that TPK Asset Management was terminated by the Hampton Roads Shipping Association-International Longshoremen's Ass ociation. The pension fund reduced its position with the money manager.
Peter Saperstone was named portfolio manager of the $79 million Fidelity Select Air Transportation and the $39 million Select Defense and Aerospace portfolios. He replaces Kevin Richardson, who left, reportedly to join a hedge fund manager. Mr. Saperstone will continue to run the $19 million Select Construction and Housing portfolio