LITTLE ROCK, Ark. - The Arkansas Public Employees Retirement System restructured its $1.4 billion fixed-income portfolio following a review, said Kie D. Hall, executive director.
Officials at the $3.2 billion fund terminated J.P. Morgan, which had run $185 million in core fixed income.
Loomis, Sayles, the fund's other bond manager, now will manage $500 million in core fixed income and $70 million in high-yield bonds. Loomis had managed $630 million in an active-duration bond portfolio; that portfolio was eliminated.
Loomis continues to manage a total of $1 billion for Arkansas - including $430 million in U.S. equity - $60 million less than before the restructuring.
Also hired for $70 million each were: J.& W. Seligman to manage high-yield bonds; Wellington Management, mortgage-backed securities; and Prudential Timber, timberland investments.
A review of the equity portfolio is expected to be finished early next year.
PBGC might kill list
of worst-funded plans
WASHINGTON - The Pension Benefit Guaranty Corp. is considering scrapping its list of 50 worst-funded corporate pension plans, an agency spokeswoman confirmed. The agency is evaluating the usefulness of the list in light of reforms made by the Retirement Protection Act of 1994, and will announce its decision soon, she said. That legislation requires corporations to tell employees if their pension plans have a shortfall, among other things.
The PBGC first published the list in 1990, using 1988 plan data.
Minnesota terminates 1,
puts 4 others on watch
ST. PAUL, Minn. - The Minnesota State Board of Investment terminated Baring Asset Management and is keeping close tabs on four other investment managers.
The $150 million managed by Baring was placed in State Street Global Advisors' EAFE Index fund. The $37 billion fund will decide in the next six to nine months whether to replace the international equity manager, said Howard J. Bicker, executive director.
The firm was dropped because of concerns over staff turnover.
U.S. equity managers Investment Advisers, Wilke Thompson and Winslow Capital will be re-interviewed by the investment committee in September because of staff turnover or performance concerns. The committee then will recommend whether to terminate those firms.
Montgomery Asset Management was placed on probation for the next six months because of its acquisition by Commerzbank.
Richards & Tierney assisted.
Equity, TAA changes
made by Arlington County
ARLINGTON, Va. - The $800 million Arlington County Employees' Retirement System terminated Loomis, Sayles as a U.S. large-cap equity manager and pared the large-cap stock portfolio of BEA Associates. The money will fund a $160 million TAA portfolio for Mellon Capital.
The fund took $115 million from Loomis, $35 million by shaving its bond portfolio and the rest from the terminated stock portfolio. The remaining $45 million for Mellon came from BEA.
Bruce O. Kallos, administrator, said Loomis was terminated because of the fund's overexposure to large-cap stocks.
ups bonds, lowers stocks
MENLO PARK, Calif. - The $230 million pension fund of Consolidated Freightways Inc. will increase its fixed-income investments and decrease its stock allocation, said Linda Lester, cash manager.
The more conservative allocation stems from an asset allocation study conducted by Strategic Investments Solutions and from a change in demographics after a company spinoff. Ms. Lester would not release the new asset mix.
No manager changes are expected.
may add asset classes
LEXINGTON, Ky. - The $220 million Lexington-Fayette Urban County Government pension fund will be considering adding a small-cap equity mandate and an actively managed high-yield bond portfolio and increasing its U.S. aggregate bond index allocation.
Consultant George Vitta of Asset Strategies Portfolio Services is assisting. He has suggested the fund use existing managers.
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.
No deadline has been set.
might expand fixed income
GENEVA, Ill. - The $760 million Carpenters Pension Fund of Illinois plans to hire a fixed-income index manager following a review of its $200 million fixed-income portfolio.
Marco Consulting has selected four candidates to present to the board in mid-October.
The board also will discuss restructuring the portfolio.
Trustees are considering foreign bonds and high-yield bonds as a way of expanding the investment vehicles used by existing bond managers Lazard Freres and Investment Advisors, said David Bodley, administrator.
Commission recapture grows at Chicago Teachers'
CHICAGO - The $8.2 billion Public School Teachers' Pension & Retirement Fund of Chicago will be sending RFIs to local commission recapture firms in a move to expand the current commission recapture program.
The fund will look at local firms as part of its policy to give preference to Chicago and Illinois firms and minority-and women-owned firms. The board will consider the adding two more firms. The fund now uses Merrill Lynch Citation.
Separately, trustees decided to commit $30 million each to the Olympus Fund II managed by Olympus Real Estate Corp. and the Blackstone Real Estate Partners II Fund run by The Blackstone Group. Funding probably will come from rebalancing of U.S. equity investments, said Mike Nehf, deputy executive director. Mercer assisted.
HAMMOND, Ind. - The $870 million pension fund of Northern Indiana Public Service Co. moved $25 million to the Templeton Emerging Markets Fund from an active, separately managed EAFE portfolio run by Templeton.
The separate portfolio was reduced to $60 million.
NYC's Hevesi seeks
help from other funds
NEW YORK - New York City Comptroller Alan G. Hevesi has written to 256 public pension fund officials, mostly of state pension funds, asking them to write to Swiss companies in which they are shareholders to determine if these companies have made, or plan to make, contributions to The Special Fund for Needy Victims of the Holocaust/Shoah.
Last month, the comptroller wrote such a letter to the 27 Swiss companies whose stock is held by New York City pension funds. As of 1996, the five New York City retirement systems had 780,720 shares, worth more than $462 million, of Swiss corporations.
Wisconsin 457 plan
might add midcap option
MADISON, Wis. - The investment committee of the $700 million State of Wisconsin 457 plan will recommend the addition of T. Rowe Price Mid Cap Fund to its investment mix, said Mary Willet, assistant director of deferred compensation.
She said the fund will replace the Seligman Capital Fund or will be offered as an additional option. She said the Seligman fund is closed to new investments for performance reasons.
In addition, she said the fund is considering a stable value manager search early next year. The Wisconsin fund is seeking to diversify its current stable value offering now with Great West Life.
names apartment finalists
SACRAMENTO, Calif. - Six finalists have been named in the $124 billion California Public Employees' Retirement System's $576 million apartment investment program - Allegis Realty Investors, McNeil Capital, SSR Realty Advisors, Prudential Real Estate Investors, Sentinel Real Estate Corp. and GID, a subsidiary of General Investment Development.
SSR, Prudential and Sentinel are incumbents. Final selection is expected in a few weeks.
David Gilbert, senior investment officer for real estate at CalPERS, will make the final choices. More than one firm is expected to be selected.
In another development, CalPERS and Union Labor Life Insurance jointly financed two California properties for a total of $21.6 million.
The two mortgages are structured as forward permanent loans and are financed one-third by ULLICO's J FOR JOBS mortgage separate account and two-thirds by CalPERS. ULLICO originates the loans for the lending program.
The California system and ULLICO have jointly invested or committed a total of $125 million in commercial mortgages since 1995. CalPERS has earmarked $200 million for ULLICO to lend on California projects.
Union fund increases
venture cap commitment
SEATTLE - The $600 million Western Metal Industry Pension Fund increased its venture capital commitment to Olympic Venture Partners. It added $5 million, bringing the manager's total assignment to $12 million. Olympic's focus includes technology.
Assets will come from cash flow. R.V. Kuhns assisted.