O'Connor Group has proposed combining its 10-year-old, $1.1 billion Retail Property Trust closed-end fund's properties, some New England Development properties and Jacobs Group Properties, along with the property management group, the WellsPark Group, a source said. If the combination goes ahead as expected, an IPO could follow.
Investors in RPT are expected to get details about the proposed merger and IPO in a couple of weeks.
No one at the O'Connor Group could be reached for immediate comment. O'Connor Group and New England Properties merged last year and formed WellsPark.
Earlier this year, staff at the California State Teachers' Retirement System gave the RPT a "needs improvement'' rating, saying it had disappointing investment returns and lacked a future strategy.
For the five years ended March, 31, 1997, the RPT has had a total compound annual gross return of 4%, the source said.
The median manager in the non-U.S. equity universe of InterSec Research underperformed the EAFE index by almost a full percentage point during the second quarter, InterSec reported. While the index rose 13%, in U.S. dollar terms, InterSec's median manager produced a 12.1% return.
According to the firm, managers' underweighting of the then-strong Japanese equity market, as well as stock selection in the United Kingdom, weighed on overall returns. However, manager performance was aided by emerging markets investments.
The board of directors of the $570 million G.T. Global Developing Markets Fund approved the conversion of the closed-end fund to an open-ended, mutual fund structure. Fund shareholders will vote on the proposal Oct. 20.
Total long-term mutual fund sales will likely break through the $700 billion in 1998, a 9% increase over the $655 billion record level that Financial Research Corp. estimates 1997 will attract. Domestic equity funds will enjoy sales of about $415 billion or 58% of total 1998 fund sales. International/global funds will also enjoy a great year next year, said FRC consultants, attracting $139 billion, 19% of total sales and a growth rate of 16% over 1997 sales.
FRC predicts that bond funds will increase sales a bit next year to $159 billion or 22% of the total market. High-yield funds are leading the race and pushing total sales of corporate bond funds up past 60% of all fixed-income fund investments.
SEARCHES & HIRINGS
City of New Orleans Employees' Retirement System will conduct a search for a small-cap value equity manager to invest between $10 million and $20 million, said Jerry Davis, board chairman. The search will be conducted by Dean Witter Investment Consulting; a firm should be hired by the end of the year.
Mr. Davis said an asset allocation study presented to the board earlier this month did not recommend new asset classes as anticipated. Nevertheless, he said, the $309 million system may consider at its Aug. 29 meeting adding real estate and a core or midcap to large-cap equity manager.
Western Pennsylvania Hospital, Pittsburgh, hired Peachtree Asset Management as a large-cap growth stock manager for its $144 million pension plan and $47 million foundation.
Peachtree replaces Columbus Circle Investors, which managed $32 million in pension assets and $8 million in foundation assets, said Mark Miller, director of internal audit and treasury services.
Evaluation Associates assisted.
James Biundo, president of U S WEST Investment Management, and John Podjasek, a retired vice president at Allstate Insurance, will be co-heads of private placements for Forstmann-Leff International. Mr. Biundo, who oversaw the U S WEST pension funds, said he will be relocating to Chicago for the job. A replacement has not been named yet, he said.
A spokesman for Allstate said Mr. Podjasek retired in 1995.
John Day was named interim executive director of the Teachers' Retirement System of Illinois, Springfield, replacing Robert Daniels, who previously announced his plans to retire.
Mr. Day will continue to perform his duties as director of government affairs at TRS.
Peter M. Halloran, director of equities at the Moscow office of Credit Suisse First Boston, resigned to form Pharos Capital Management, which will launch a fund for investing in Russian securities.
Pharos Russia Fund will invest in equities selected by the firm's team of investment specialists based in Moscow.
Mr. Halloran said he expects to raise an initial $150 million within a month's time, principally from institutions and individuals in North America and Europe