Brinson Partners and Long-Term Credit Bank of Japan's investment management unit will start their joint venture with $8.7 billion in assets from Japanese investors. The assets, including $7 billion in Japanese pension funds, will be transferred from LTCB Investment Management.
The venture, formed as part of a larger teaming of Swiss Bank and LTCB to provide financial services in the Japanese market, will get under way in a few months as soon as Brinson can dissolve its 7-year-old Japanese money management joint venture with Yasuda Fire & Marine Insurance. That venture, Yasuda Kasai Brinson, manages $2.8 billion. Brinson plans to sell its share of ownership in YKB to Yasuda, which will retain the assets.
Montgomery Ward Holding Corp., Chicago, might terminate its $1 billion pension plan and use surplus assets to help pay creditors. The company, which filed Chapter 11 bankruptcy July 7, has $270 million in surplus pension assets. In addition to paying creditors, observers expect Ward's would create a successor plan and use the remaining surplus, after taxes, for the new plan.
David Comstock, senior investment analyst with the Signature Group, Schaumburg, Ill., which oversees the pension fund, wouldn't comment. But bankruptcy lawyers and other experts say Ward's creditors probably will push Ward's to terminate the plan.
Sears Roebuck & Co., Chicago, will outsource the administration of its $1.8 billion defined benefit plan to Wellspring Resources, a joint venture between State Street Global Advisors and Watson Wyatt Worldwide. Investment management is not affected.
Sears earlier selected SSgA as bundled provider for its $4.6 billion 401(k) plan. Sears reportedly is seeking to expand its investment options from five to eight.
The 401(k) plan is currently managed internally.
Delmarva Power and Light Co., Wilmington, Del., and Atlantic Energy Inc., Pleasantville, N.J., are looking at merging their defined benefit plans. The two companies themselves are expected to be merged by the end of the year.
The possible joining of Delmarva's $750 million plan and Atlantic's plan is prompting fund officials to look at designing a new, larger plan, said William Mackey, manager of investments and compliance at Delmarva. Watson Wyatt is assisting.
The Zeneca Group PLC pension fund hired First Quadrant in London to provide an innovative protection strategy for the £1.7 billion ($2.84 billion) fund. The TAA strategy is tied to new minimum funding requirements created by the 1995 Pensions Act. Under the approach, First Quadrant will provide an overlay, protecting the fund against downside volatility from the more short-term-oriented MFR test while not upsetting the fund's more long-term asset mix.
In addition, Zeneca's treasury department will buy out-of-the-money options to protect against catastrophic risk.
David E. Walker, formerly a principal of Equinox Capital Management, has opened his own investment management firm, Normandie Capital Management in Boston. Mr. Walker said he has $30 million under management. He is taking a quantitative investment approach, blending growth and value management styles.
Mr. Walker has not been replaced yet at Equinox.
SEARCHES & HIRINGS
TRW Inc., Cleveland, revamped its $2.4 billion 401(k) plan, hiring Putnam Investments as bundled provider. New options are Putnam Income Fund, George Putnam Fund of Boston, Putnam S&P 500 Fund, Putnam Investors Fund, Putnam Russell 2500 Index Fund, Sanford Bernstein International Equity Fund and PBHG Growth Fund. A stable value fund from PRIMCO and the TRW company stock fund were retained.
Putnam replaces Bankers Trust as record keeper. Bankers also had been manager for S&P 500 and Russell 2500 index funds and a bond index fund. Callan assisted.
Air Touch Foundation, San Francisco, hired Barclays Global Investors to manage assets in a strategy that combines a core indexed approach with alpha strategies, said Diane Paul, global communications director at Barclays. Neither the size of the account nor the size of the foundation could be learned.
Banque de Gestion Privee, Paris, hired Boston Partners as subadviser for a U.S. stock mutual fund. Boston Partners will run $10 million in large-cap value and $20 million in midcap value equities. It marks the Boston firm's first move into the European market, said Michael Jones, Boston Partners principal and marketing director.
International Brotherhood of Electrical Workers, Local #1 Pension Benefit Trust Fund, St. Louis, hired Putnam Institutional to run $33 million in a balanced portfolio for its $345 million defined contribution plan. The plan hired three other firms, which Floyd Davis, administrative manager, would not identify. The assets had been run by the trustees. Asset Consulting assisted