New York State Teachers' Retirement System trustees today approved a new asset allocation plan that on paper raises the $65.2 billion fund's equity allocation, but actually will result in paring stock investments.
The board increased total equities to a target of 55%, from 50%. The strong stock market, however, has driven equities to 60% of the total portfolio, said George Philip, CIO of the Albany-based fund. The only other asset type significantly affected in the new allocation is mortgages, which will be reduced to a 6% target from 8%.
The board also committed additional money to two existing real estate commingled funds and to an existing separate account real estate manager. The Allegis Realty Fund Separate Account and the Prudential Property Investors Separate Account each will receive $50 million, boosting the fund's investment in each to $168.8 million and $151.8 million, respectively. Cabot Partners will receive an additional $100 million for the separate account it manages for the system.
The Oregon State Treasury is trimming a list of candidates to manage a portion of its non-U.S equity portfolio, following the termination of two firms that oversaw a total of $580 million for the state's pension fund.
Treasury staff and consultants Wilshire Associates and Frank Russell will discuss which candidates to recommend to the Oregon Investment Council, probably by the end of September. A list of 22 firms has been identified. They include Bank of Ireland, J.P. Morgan, Oechsle International and Brandes Investment.
The $25 billion Oregon Public Employes' Retirement Fund has about 20% of its portfolio invested in international equities. With the terminations in May of Barings Asset Management and DSI International, almost 50% of Oregon's international portfolio is under passive management, exceeding the fund's policy target of 30%. Jay Fewel, senior equities investment officer, said the fund would have to shift about $950 million from passive to active management to reach its policy target.
DTE Energy's $1.4 billion pension fund is preparing for a managed futures manager search following an asset allocation study that doubled alternative investments to 10% of total assets. The Detroit-based fund will allocate 2.5% of total assets to each alternative subclass; managed futures; market nuetral; timberland; and mezzanine debt. Funding will come from equity and bond allocations, said Allen W. Anning, director of trust fund management. No managers will be terminated.
No RFPs have been issued. In timberland and mezzanine investments, he expects consultant New England Pension Consultants to handle individual deals for the fund.
Aberdeen Asset Management is acquiring Prolific Financial Management in a deal that will boost Aberdeen's assets under management to £11 billion ($17.9 billion) from £3.1 billion ($5.1 billion). Subject to shareholder approval, Prolific's parent, The Scottish Provident Institution will get 58.4 million new Aberdeen shares, valuing Prolific at £55.5 million. Combined with Scottish Provident's existing 1.5 million holding of Aberdeen stock, the life insurer will own 41% of Aberdeen's equity.
The combined firm will be renamed Aberdeen Prolific Asset Management. It will continue managing Scottish Provident's life assets and unit-linked funds, accounting for 92% of Prolific's assets under management.
Aberdeen plans to start marketing its international, Asian and emerging market equity products to U.S. institutions in a joint venture with Phoenix Duff & Phelps.
SEARCHES & HIRINGS
Illinois State Board of Investment, Chicago, hired Nicholas-Applegate and J.& W. Seligman to each manage $50 million in small-cap growth equity for the $6.3 billion fund. The firms replace Chancellor LGT. The search was conducted in-house.
Charles E. Culpeper Foundation, Stamford, Conn., committed $5 million to a REIT fund managed by CRA Real Estate Securities. The $193 million foundation will fund the commitment from cash leftover from terminating small-cap stock manager Pinnacle Associates earlier this year, said Boris Wessley, comptroller. Cambridge Associates assisted.
Amarillo Hospital District, Amarillo, Texas, hired Amarillo National Bank as custodian for its $22 million defined benefit fund. The bank will replace the local branch of Boatmen's Trust, which is exiting the custodial business. The search was conducted in-house.
Susan Hannah was hired as CIO of the $720 million Oklahoma State Insurance Fund, Oklahoma City. Ms. Hannah replaces Bill Strecker, who joined Bank of Oklahoma. Ms. Hannah previously worked as assistant director of investments for the state commissioner of the land office.
Richard Morris is joining Putnam, Lovell & Thornton as managing director, opening its new London office. Mr. Morris, formerly CFO for Cursitor Alliance, will continue to consult to his former firm but has not been replaced