Indiana Public Employees' Retirement Fund, Indianapolis, will send out RFPs in 30 to 60 days for at least $1 billion worth of passive and enhanced passive equity assignments, said Garth Dickey, executive director.
The $7.5 billion fund will be looking for a large-cap equity index manager and an enhanced large-cap equity index manager, each for at least $500 million to manage. After next week, the fund will have put about $700 million into equities, after receiving voter approval to do so last November.
The searches will come on the heels of the board adoption of new policies and procedures today, which now include the use of futures for the replication of market returns, and the use of BBB rated bonds and Yankee bonds.
Fidelity's Magellan Fund already has received an estimated net inflow of $62 million in September, as retail investors race to get into the fund before it closes at the end of the month. The early pace of investments has caused Fidelity watcher Alpha Equity Research to up its cash flow estimates for September to between $200 million and $300 million, compared with $1 million in August.
Magellan had net outflows of $11 billion from April 1996 to July 1997; a net $4 billion left the fund from January to July.
Sens. Chuck Grassley, R-Iowa, and John Breaux, D-La., plan to introduce legislation next week to ensure plan participants get the correct amount of pensions owed them. Mr. Grassley told executives at the Financial Executive Institute's Committee on Investment of Employee Benefit Assets that the legislation will require employers to provide periodic benefit statements to all employees. For the first time, union pension plans also will be required to provide such statements. The legislation also would require the Labor Department to draft an alternative dispute resolution procedure.
Georgia-Pacific Corp., Atlanta, increased international equity exposure to 20% from 16% of its $1.9 billion pension fund, said John Stettler, benefits director. To compensate, it reduced its U.S. stock allocation to 55% from 59%, and terminated one large-cap growth manager. Mr. Stettler declined to name the firm affected. There are no plans to add international equity managers, he said. The revisions were recommended by Ennis, Knupp.
Metal Industries Benefit Funds Administrators, Johannesburg, is exploring investing 10% of the funds' 25 billion rand ($5.3 billion) in assets in overseas stocks.
The pension and provident funds might allocate $100 million in global mandates in the first quarter of next year, said John Symons, portfolio manager. Domestic equities would be reduced to fund the allocation. The pension fund also is close to hiring a global custodian.
Johns Manville Corp., Denver, hired three balanced managers in a restructuring of its $700 million master pension trust. Capital Guardian, Putnam and J.P. Morgan Investment Management will replace the fund's current managers. The new managers will be measured against a benchmark of 60% stocks and 40% bonds, including a 25% allocation to foreign securities.
Funding should be completed by the end of the third quarter, said Steven J. Wagner, director, pension investments. He would not identify the terminated firms or how the assets will be split up. Mercer assisted.
Florida State Board of Administration, Tallahassee, hired Salomon Brothers Asset Management, PIMCO, OFFIT Bank and BEA Associates as high-yield bond managers for its $17 billion bond portfolio. The firms will evenly split $850 million, which will come from cash and new contributions to the $70 billion fund.
Colorado Fire & Police Pension Association, Englewood, hired Putnam Institutional Management as a European equity manager for its defined benefit plan. Putnam replaces Walter Scott & Partners in managing the $70 million portfolio. Walter Scott was terminated for performance reasons, said Ruth Sieler, executive director. Officials at the firm could not be reached for comment. Pension Consulting Alliance assisted.
Bechtel Power Corp., San Francisco, added four mutual funds to its $3.5 billion defined contribution plan. Baron Asset Fund and the T. Rowe Price Mid-Cap Growth Fund were added to the plan's aggressive growth option. The Janus Overseas Fund and the American Funds' Euro-Pacific Growth Fund are new funds for the international growth option. Each option now contains three funds. The plan offers a total of six investment options that contain a total of nine mutual funds. Callan Associates assisted.
Joseph DelCasino, deputy comptroller for real estate for the $90 billion New York Common Retirement Fund, Albany, resigned, said Jeffrey Gordon, a spokesman for the system. Mr. DelCasino was unavailable for comment. However, industry sources said he was joining a real estate affiliate of Donaldson, Lufkin & Jenrette. That could not be confirmed