California State Teachers' Retirement System officials, Sacramento, could decide a number of key asset allocation issues at an investment committee meeting on Wednesday.
Issues include the allocation of assets between active and passive domestic equity management, the viability of global bonds and the future role of active management of international equities. Other issues include the possibility of CalSTRS staff internally managing passive domestic equities, evaluation of the securitized real estate market and the best combination of real estate staff, advisers and consultants. CalSTRS has $75 billion in assets.
Memphis (Tenn.) Light, Gas & Water Division Pension System, with $760 million in assets, is searching for a consultant.
Responses to the RFP are due July 19. A decision is expected by mid-August. The search is part of a periodic review undertaken every few years.
Incumbent Consulting Services Group is in the running, said John W. McCullough, manager, finance and treasury.
A total of 68% of CFOs surveyed by Watson Wyatt Worldwide said concerns over Social Security have changed the way they communicate to their employees about saving for retirement. The study also reports 33% of financial executives believe Social Security woes have influenced the design of their company's retirement plans.
CFOs also offered ideas for Social Security reform, with 79% seeing the establishment of 401(k)-type accounts where workers could control investments as the cure. Watson Wyatt surveyed 347 companies, organizations and local governments that employ a total of 33 million people.
Western Metal Industry Pension Fund, Seattle, increased its venture capital commitment to Olympic Venture Partners for its $600 million pension fund. It added $5 million, bringing the manager's total assignment to $12 million. Olympic's focus includes technology. Assets will come from cash flow. R.V. Kuhns & Associates assisted.
Standard & Poor's Financial Information Services is introducing a composite index designed to track the performance of REITs. The new index consists of 100 REITs and covers more than 80% of the securitized real estate market. Issues have to be traded on a major U.S. stock exchange to qualify and must have a market value of at least $100 million. The REIT Composite index is composed of equity, mortgages and hybrids. Roughly 25% of the index is retail; 23%, is apartments; 16% is industrial and offices; and the rest mortgages and hybrids.
Institutional Shareholder Services, the proxy consulting firm, opened an office in London, its first overseas. David F. Dando, previously ISS director of custom research, will head up the London office.
California Public Employees' Retirement System, Sacramento, committed $150 million to the Behrman Capital II L.P., tripling an investment made in the general partner's first fund. The $110 billion pension fund wants to put $1 billion to $1.5 billion a year in partnerships and $500 million to $1 billion in new direct investments, said Brad Pacheco, a CalPERS spokesman.
The commitment allows Behrman to reach its first closing with $300 million total, confirmed a spokesman for the general partner. Behrman Capital II will target buy-outs of emerging growth companies in information technology, health-care and contract manufacturing industries.
Teamsters Local 584 Pension Fund, New York, hired Putnam Institutional Management to run $15 million in midcap equities, a new style for the $120 million Taft-Hartley fund. Funding came from reducing the size of the portfolios run by existing U.S. equity managers 1838 Investment Advisors and Smith Barney Capital Management, said John Driscoll, co-counsel representing the union. Prudential Securities assisted.
Alan Livsey will join Investment Advisers Inc. as a senior fund manager and head of the Latin American team managing the new Latin American mutual fund, a new position. The fund has about $5 million in assets. Mr. Livsey also will be a part of the emerging markets group at the firm. Currently, Mr. Livsey is head of Latin American research at Kleinwort Benson Investment Management, where his replacement is being sought.
Stephen M. DuFour was named manager of the equity component of the Fidelity Balanced Fund. Kevin E. Grant will continue to run the fixed-income allocation. Mr. DuFour replaces Stephen R. Petersen, who will concentrate on managing the Fidelity Equity-Income Fund and the Fidelity Variable Insurance Products Fund: Equity Income Portfolio. Mr. DuFour most recently managed the Fidelity Convertible Securities Fund; David Felman will replace him on that fund