Simon DeBartolo Group, the largest publicly traded real estate investment trust, bid $19.37 a share yesterday for the Retail Property Trust, a $1.1 billion private REIT owned largely by pension funds.
The bid was the highest of eight submitted by other public REITs and investor groups. It also exceeds a proposal by O'Connor Group, manager of RPT, to merge RPT's regional malls with those from two developers and roll them up into a $4 billion to $5 billion public REIT.
The IPO proposal, called Grand Slam, involved the merger of regional malls from The Richard E. Jacobs Group and New England Development. The company would own 52 and would manage another 33.
``We have the ability to match the offer,'' said RPT President Bruce Macleod. ``That is under consideration now.''
California State Teachers' Retirement System board members yesterday approved beginning internal domestic equity management with a $1 billion S&P 500 index fund. The money will come from Barclays Global Investors, which runs a $17 billion S&P 500 index portfolio for the $80 billion Sacramento-based system. Funding of the internal S&P 500 fund should begin in March, subject to CalSTRS board approval of policies and procedures to begin internal indexing.
Eskom Pension and Provident Fund, Bryanston, South Africa, will hire up to five international equity managers to run 1.2 billion rand ($255.2 million) by year-end, said Linda Fleming, financial engineer. The fund has not yet chosen finalists. The fund also is seeking a global custodian, which likely will be named by late November.
The 13 billion rand ($2.77 billion) state-owned electricity company pension fund already has engaged in swaps totaling nearly 10% of assets, the legal limit South African funds can invest abroad. An undisclosed portion of those assets are invested in non-South African bonds with the balance being a reserve with the South Africa Reserve Bank.
EDO Corp., College Point, N.Y., is considering adding several investment options to its $20 million 401(k) plan, said William J. Frost, vice president-administration.
The plan is studying the type and number of options, but is leaning toward several in equities. It expects to stay with Massachusetts Mutual, its existing bundled provider, which offers the plan's three investment options. A decision may be made before the end of the year.
Rhode Island State Retirement Board, Providence, hired Watson Wyatt Worldwide as actuary for its $5.5 billion pension fund. Watson Wyatt replaces William M. Mercer, whose contract expired earlier this year. The board also interviewed Milliman & Robertson.
Chicago Mercantile Exchange officials late last night proposed a merger plan for the clearing operations of the CME and the Chicago Board of Trade. The proposal seeks to address some of the sticking points in previous merger negotiations, said Ellen Resnick, a CME spokeswoman. A CBOT spokesman said the proposal is one of many under consideration at the exchange.
The CME proposal also was sent for review to the Futures Industry Association and to the New York Mercantile Exchange, which already is a partner in CME's Clearing 21 software system. CME invites NYMEX and other exchanges to participate, a CME statement said.
Stock market volatility in the second half of August apparently scared off investors, according to Investment Company Institute. Estimated net flows to stock mutual funds were only $13.5 billion, roughly half of the July net flow of $26.6 billion.
Meanwhile, net investment by Schwab investors in domestic equity mutual funds was down to $609.9 million in August from $721.7 million in July. International equity markets may have spooked them even more: there was a net outflow of $39.5 million from Schwab international growth equity funds in August, compared to a net inflow of $478.2 million in July.
Taxable bond mutual fund investments jumped to $249.2 million in August from the $104.7 million Schwab customers invested in funds in the category in the previous month.
CITGO Petroleum Corp., Tulsa, Okla., hired Wellington Management and Grantham, Mayo, Van Otterloo to run core EAFE international equity portfolios of $20 million each. Funding will be from a rebalancing of U.S. equity assets, said Vickie Ferguson, financial analyst. She said the fund plans a small-cap equity search within the next few months. The fund has about $200 million in total assets. Merrill Lynch Consulting assisted.
University of California, Oakland, hired Warburg Pincus Counsellors to manage $142 million in a venture capital/private equity distribution strategy for its $29.9 billion defined benefit plan. The assets had been managed internally. The search was done in-house.
CORRECTION: Albert Hsu, who will join Xerox Corp. as principal-trust investment, formerly was director, member services research, at The Common Fund. His former title was incorrect in the Sept. 4 P&I Daily