The District of Columbia Retirement Board, with $4.5 billion in assets, will need to conduct an asset allocation study to best determine how to invest the $1.3 billion in assets that will remain after $3.2 billion in assets - and the fund's $4.8 billion in unfunded accrued liabilities - are transferred to the federal government, according to Jeanna M. Cullins, executive director.
The board now has $2.4 billion in U.S. equities, $756 million in international equities, $859 million in U.S. bonds, $214.1 million in global bonds, $109.3 million in cash, $65 million in alternative investments and $61.6 million in real estate.
The changes will be made under legislation signed into law by President Clinton earlier this month as part of the massive tax package.
Lexington-Fayette Urban County Government, Lexington, Ky., will be considering adding a small-cap equity mandate, an actively managed high-yield bond account and increasing its U.S. aggregate bond index mandate for its $220 million defined benefit plan.
Consultant George Vitta of Asset Strategies Portfolio Services has given his recommendations to the board to diversify the current investment managers' roles. The board has yet to finalize the amounts to be allocated to specific asset classes and will be discussing the asset allocation at future meetings. They have not set a deadline for determining an asset mix, said Mr. Vitta.
California State Teachers' Retirement System, Sacramento, board of trustees approved the preparation of an RFP for a new real estate consultant and the identification of a list of independent real estate fiduciaries that could help with selection of real estate managers.
Previously, the $80 billion fund relied primarily on a real estate consultant alone for that work, but the board and staff believe the tandem approach will strengthen the real estate program and avoid potential conflicts of interest. The wording of the RFP will be brought to the board as early as next month. Institutional Property Consultants, the previous real estate consultant, resigned earlier this year.
Total long-term mutual fund sales will likely break through $700 billion in 1998, a 9% increase from the $655 billion record level that Financial Research Corp. estimates 1997 will attract. U.S. equity funds will enjoy sales of about $415 billion or 58% of total 1998 fund sales. International/global funds also will enjoy a great year next year, said FRC consultants, attracting $139 billion, 19% of total sales and a growth rate of 16% from 1997 sales.
FRC predicts bond funds will increase sales a bit next year to $159 billion or 22% of the total market.
Sisters of Charity of St. Augustine (CSA) Health System, Cleveland, hired nine investment managers for its $250 million foundation. Hired were: Boston Partners and Brinson Partners, for large-cap value equity; Oak Associates and Montag & Caldwell, large-cap growth; Seix Investment Advisors, core domestic bonds; Scudder, Stevens and Clark, international equity; Alliance Capital and Scott & Stringfellow, small-cap growth stocks; and Crabbe Huson, small-cap value equity.
John Faulstich, senior vice president of finance, would not give amounts for each assignment. Funding will come from the consolidation of four regional foundations' cash assets. Mercer assisted.
The State of Nevada 457 plan selected ICMA Retirement as its second service provider. The $144 million plan will add 23 diversified investment funds through ICMA effective Jan. 1. The plan already offers 21 funds through ITT Hartford. It added ICMA to comply with a state statute requiring investment options from at least two service providers. Other finalists were Aetna Life and Great West Life.
Tom Marsico left Janus to pursue other interests. He was manager of the more than $5 billion Janus Twenty Fund and the more than $1.5 billion Growth and Income Fund. Mr. Marsico's intentions are not known.
Janus named Scott Schoelzel as portfolio manager of the Janus Twenty Fund. He relinquished management of the Janus Olympus Fund to Claire Young, a portfolio manager. David Corkins, an assistant portfolio manager for the Janus Mercury Fund, assumed management of Janus Growth and Income.
Scott Gildner, one of the founders of Wellspring Resources, left Wellspring to establish an independent human resources and benefits outsourcing consulting business. Gildner & Associates will focus on strategic consulting on total benefits outsourcing activities. Mr. Gildner has not yet been replaced at Wellspring.
Jack Chang joined Putnam Investments as a vice president and portfolio manager in the international equities group.
Mr. Chang most recently was a partner and vice president at Columbia Management, where he managed the Columbia International Fund. Officials for Columbia Management did not return calls regarding his replacement