Fidelity Investments is hiring Bankers Trust as a subadviser for its indexed mutual funds, its first use of an external money manager for its funds.
Bankers Trust will assume management in the fall, after a shareholder vote, of Fidelity's three S&P 500 index funds: the $7.3 billion Spartan U.S. Equity Index, the $2.7 billion Spartan Market Index and the $1.4 billion VIP II: Index 500 Portfolio.
Fidelity plans to launch three new index funds in the fall, also to be managed by Bankers Trust.
Fidelity will continue to manage its commingled index funds. A Fidelity spokeswoman said the company has no plans to use any other subadvisers.
The Oregon Investment Council, Salem, terminated Hotchkis and Wiley, which managed more than $738 million in active U.S. stocks for the $25 billion Oregon Public Employes' Retirement Fund. The council also put Columbia Management and Nicholas-Applegate on its watch list.
The money from Hotchkis and Wiley will be placed, at least temporarily, in a value-oriented indexed portfolio with Barclay's Global. Fund officials still must decide whether to re-allocate the money to other firms, said Dan Smith, Oregon's director of investments. Sharp undeperformance against the S&P 500 and the sale of Hotchkis and Wiley to Merrill Lynch were reasons for the termination. Hotchkis and Wiley and Merrill officials declined to comment.
Columbia, which manages more than $740 million for Oregon, and Nicholas-Applegate, which runs about $441 million, are on watch because of dissatisfaction with the firms' recent performance and concerns about their direction, council members said. Both will be asked to give written responses.
Chevy Chase Bank today announced an agreement to purchase ASB Capital Management from NationsBank. Terms of the deal were not disclosed.
The new ownership will have little effect on our day-to-day operations, nor will there be any changes in the company's management structure,'' ASB President Robert M. Phillips said in a statement.
Chevy Chase previously had no institutional money management units
Alliance Capital will change its structure from a master limited partnership to a corporation if legislation that would preserve its MLP structure does not make it into Congress' final budget bill.
The corporation will own the partnership interests of unitholders exchanging their units for publicly traded common stock in the new corporation.
Officials at CIPSCO Inc., parent of Central Illinois Public Service Co., Springfield, and Union Electric Co., St. Louis, are studying whether their employee benefit funds will be consolidated as a result of the merger of the two companies. In defined benefit assets, Union has $925 million and CIPSCO, $290 million. In 401(k) assets, Union has about $500 million and CIPSCO, $100 million.
It could take a year or more to complete the study and make a decision.
SEARCHES & HIRINGS
Memorial Sloan Kettering Cancer Center, New York, committed $10 million each to Blackstone Capital Partners III Merchant Banking Fund and WCAS Capital Partners III fund; $20 million to J.P. Morgan for a global multimarket fund; and $10 million to the S.C. Fundamental Value Fund, a global hedge fund. Funding will come from existing U.S. equity managers; none will be terminated.
The hires are part of the $1.5 billion general fund's new $190 million allocation to alternatives, said Mike Gutnick, senior vice president, finance. The fund has committed $130 million and is still seeking to add other managers.
Cambridge Capital Advisors is assisting.
The Central Pension Fund of International Union of Operating Fund Engineers, Washington, hired Boston Partners to manage $120 million in equities for the $4.7 billion fund.
John Szczur, director of investment, said funding came from a restructuring. Several managers were terminated, but he wouldn't name them. Ennis Knupp assisted. Boston Partners will run the money in its premium strategy, which invests in non-traditional investments and large-cap value stocks.
Connecticut state Treasurer Christopher Burnham said he will resign later this summer to become the president and CEO of Columbus Circle Investors.
Mr. Burnham is the sole trustee of the $13.8 billion State of Connecticut Retirement & Trust Funds, Hartford. He will take over the CEO duties from Irwin Smith, the founder of Columbus Circle, who continues as CIO. Mr. Burnham's new position does not preclude him from future runs for public office, said Patrick O'Neil, a spokesman.
Mr. Burnham was rumored to be a candidate for the U.S. Senate and a future gubernatorial candidate