New York State's public employee pension funds would be allowed to increase their investment in domestic equities to 70% from 60%, according to the budget bill passed during the final hours of the 1997 session Wednesday. The measure now awaits the signature of Gov. George Pataki.
The measure would also increase the basket clause to 15% from 7.5%. A basket clause restricts non-qualified, usually private, investments to a certain percentage of a pension fund's total assets.
Median growth equity managed portfolios outperformed the S&P 500 in the quarter ended June 30, but underperformed for the year, according to the most recent PIPER report.
The overall median growth portfolio returned 17.9% for the quarter and 22.8% for the year, compared with 17.5% for the quarter and 34.7% for the year for the S&P 500.
The median small-cap growth portfolio was top ranked for the quarter, returning 18.9%, but worst for the year, returning only 10.4%. The worst performing category for the quarter was large-cap value, returning 14.7%. That category was the second best for the year, returning 30.7%. The median large-cap core equity managed portfolio topped the one-year returns, with 34.4%.
East Bay Municipal Utility District Employees' Retirement System, Oakland, Calif., may search for a small-cap value manager as a result of a review of its four domestic equity managers, said Lloyd J. Sawchuk, treasury manager for the $420 million pension fund.
The review includes a focus on small-cap to midcap value and growth managers and possibly increasing the allocation to one or both areas. Fund officials should make a decision in September. If the fund decides to move ahead, ``it would probably mean adding another manager'' and doing a search, he said.
Mercer is assisting.
East Bay Municipal is evaluating Denver Investment Advisers, which handles small-cap to midcap growth; Fidelity, large-cap growth; and Sturdivant and Institutional Capital, both large-cap value.
Asking prices on retail properties nationally increased 15.5% for the year ended June 30, according to Property Information Exchange, an independent information service.
Asking prices on retail rose to $114.65 per square foot, up from $99.22 during the period, according to PIX data. But capitalization rates for retail properties remained level at 9.9% for the year. Apartment prices slipped to an average of $57.67 per square foot from $59.50. Cap rates in apartments inched up to 11.7% from 11.3%. Office prices nationally increased to $86.03 per square foot from $79.82. Cap rates increased to 10.4%, up from 10.2% for the period.
Amesbury (Mass.) Town Retirement System may be starting a search for a small-cap equity manager and REIT manager within the next month, said Sheryl Trezise, retirement administrator. The $17 million fund probably will make small allocations to the new asset classes, slated to be funded from current stock and bond investments.
The search would be part of the restructuring of the fund that started earlier this year.
Hannah Group would assist in the search.
Federal Express Corp., Memphis, hired Oak Ridge Investments as a midcap domestic equity manager for its more than $3 billion defined benefit fund. The amount of the assignment wasn't available.
Staffordshire County Council, Stafford, England, with assets of £1.2 billion ($1.9 billion), hired Northern Trust London as custodian for the fund's domestic, Japan and Pacific Basin equity investments, confirmed Richard Tettenborn, county treasurer. The individual managers previously provided custody services for the assets they oversaw on behalf of the council. Northern Trust previously was custodian for the fund's North American and European assets.
Amerisure Insurance Co., Southfield, Mich., hired Lincoln Capital Management to run $20 million in an fixed-income index portfolio for its $40 million defined benefit plan. The assets had been run internally, said Dick Saranen, vice president of investments.
First National Bank in Lewis County, Vanceburg, Ky., hired First & People's Bank & Trust as custodian for its pension plan, replacing Pittsburgh National, said Kathy Dillow, operations officer at First National. She declined to reveal the size of the fund.
Robert R. Evans joined Trust Company of the West as a managing director. He will serve on TCW's asset allocation team and sit on all investment committees. Mr. Evans formerly operated Evans Associates, a consulting firm to endowments, small- and medium-size pension funds and investment management organizations. Prior to that, he was consulting CIO for the State of Connecticut Retirement and Trust Funds and managed retirement plans for J.C. Penney and Xerox