California Institute of Technology's investment committee approved a new asset allocation policy that commits 25% of equity to alternative investments - up from only a small amount before, said Treasurer Philip Halpern.
Much of the money will come from publicly traded equities, although that change ``will not happen overnight,'' he said. The Pasadena-based university has approximately $1.3 billion of endowment and foundation assets.
The new allocation calls for 80% equity and 20% fixed income; previously the policy was 75% equities and 25% fixed income. A decision on how to implement the overall new strategy is likely this summer, he said.
Charles E. Culpeper Foundation, Stamford, Conn., is planning to make its first REIT investments ``rather soon,'' and boost venture capital later in the year, said Boris Wessley, comptroller.
The $190 million fund will invest cash flow from its current real estate funds into a REIT or a REIT fund of funds. The venture capital allocation is expected to increase to 5% of total assets from 3%. The board is looking specifically at European venture capital. Cambridge Associates is assisting.
The Vanguard Group of Investment Cos. established an in-house consulting group. The new group, Vanguard Fiduciary Services, will provide smaller defined benefit, endowment and foundation clients with direct access to consulting and portfolio review services, such as performance measurement, analysis and attribution, said Shelton Unger, head of institutional sales and marketing. Vanguard also is beta testing with a few clients now an asset allocation service for organizations that want to invest all of their assets with Vanguard.
SEARCHES & HIRINGS
Union Electric Co., St. Louis, will begin a search in July for a U.S. large-cap equity manager for its $925 million pension fund, said Robert C. Porter, treasurer of CIPSCO Inc., Springfield, Ill., which is merging with Union Electric. Mr. Porter, who is assisting on the Union Electric fund, expects the search will be completed in about a month and a decision on a hiring made by the end of August. The fund hasn't decided how much the assignment will be. It will come from a reallocation. Mercer is assisting.
Oklahoma City Employees' Retirement System narrowed its custodian search to Bank of Oklahoma and Bank One Oklahoma. The board for the $220 million system will make a decision next month, said Rena Hutton, retirement system administrator. The new custodian will replace Boatmen's First National Bank of Oklahoma; Boatmen's was sold to NationsBank, which is exiting the custody business.
After the new custodian is hired, Ms. Hutton said the plan expects to conduct an asset allocation study and will consider adding additional asset classes to the plan.
Fiduciary Capital Advisors assisted.
Oregon Public Employes' Retirement Fund, Salem, will invest $50 million in HSBC Private Equity Fund 2. This is Oregon's first direct investment in private equity in the Far East, said Jay Fewel, the equities manager. HSBC now has $350 million committed to the fund. Other investors include: Colorado Public Employees' Retirement Association, Denver, $100 million; the pension fund of BellSouth Corp., Atlanta, $75 million; the Weyerhaeuser Co. pension fund, Tacoma, Wash., $50 million; and the pension fund of Pacific Telesis Group, San Francisco, $25 million.
PECO Energy Corp., Philadelphia, hired Fidelity Institutional Retirement Services to provide record keeping, employee education and some investment management for its $410 million 401(k) plan. A fund spokesman said PECO previously handled record keeping and trust activities internally. New investment options are the Putnam Equity Income Fund, Fidelity Spartan U.S. Equity Index Fund, Templeton Foreign Fund and the Franklin Small Cap Growth Fund. PECO retained its existing seven funds and also shifted to daily valuation from quarterly.
Pennsylvania Public School Employes' Retirement System, Harrisburg, invested in two real estate funds. The $33 billion fund invested $150 million in LF Strategic Realty Investors II and $50 million in Security Capital Group's private REIT. Both will be funded from cash. Institutional Property Consultants assisted.
University and Community College System of Nevada, Reno, hired Pacific Investment Management to run $51 million in U.S. and international fixed income. It terminated Sanford C. Bernstein, which managed $43 million in U.S. core fixed-income and an $8 million international bond portfolio run by The Common Fund. The Common Fund will continue to manage $50 million in equities for both the endowment fund and the system's operating fund.
Hiring PIMCO helps consolidate the bond portfolio and to save on fees, said Tim Ortez, director of banking and investments for the $180 million endowment fund. Cambridge Associates assisted