The Iscor Pension Fund, Pretoria, South Africa, is switching to a core-satellite approach for international investing, a move that eventually will reduce its manager roster to nine from 16.
Hans Nel, CEO of the 12 billion rand ($2 .57 billion) fund, is shifting half of its $215 million international allocation to a core approach. State Street Global Advisors will manage about $50 million in an index fund tracking the MSCI World Index (ex-South Africa), incre asing an existing $22 million portfolio. Eventually, SSgA's portfolio will be raised to a full 50% of the core approach. Wellington Management and Capital International each will run about $20 million to $25 million in internationa l value- and growth-oriented portfolios, respectively.
Regional mandates of $20 million to $25 million will go to Oppenheimer Capital for U.S. equities and Mercury Asset Management for European equities.
Either incumbent U.S. and e merging markets manager SEI Investments or Frank Russell will manage Far Eastern equities in a fund-of-funds approach. Incumbent Wasserstein, Perella will continue managing a $28 million emerging markets debt portfolio. Another $5 million will go to Union Bank of Switzerland for international bonds, but the Iscor fund needs to swap more domestic assets for international securities first. Mr. Nel declined to name the firms that will be terminated.
The SEC is considering retooling the form ADV so that investment advisers provide specific details of their soft-dollar arrangements with brokerage firms, Barry B. Barbash, director of the agency's investment management division, told the Lab or Department's ERISA Advisory Council today.
Currently, the form asks investment advisers to specify if research is a factor in determining to whom they direct brokerage, and to describe the research products and services they receive from the brokers in return. It also asks if advisers paid higher commissions for the trades than they needed to and to describe the procedure they used in the previous fiscal year to direct trades to brokers.
Bradford County Employees' Retirement Fund, Towanda, Pa., will decide within the next month or so whether RFPs for an investment manager will be sent out. The $26 million fund lately has been swamped with calls from managers and consultants looking to gain some business, said Gary Wood, chief clerk and secretary to the pension board.
The board now uses C.S. McKee and is happy with the firm's performance, he added. Trustees will meet again on Oct. 28, and are expected to decide if an RFP will be sent out.
Vermont State Employees' Retirement System, Montpelier, is searching for its first U.S. small-cap stock manager to diversify its $800 million-plus portfolio at the recommendation of its consultant, Wilshire, said James H. Douglas, state treasurer. The fund has not yet decided where the money will come from, or whether to hire a growth or value manager. Trustees probably will review finalists in the small-cap search in October.
The system also decided to add $40 million to an S&P 500 index fund managed by Alliance Capital, which now has $47 million. Money will come from cutting back the allocation to Delaware Investment, which had $177 million in domestic large-cap value equities. Mr. Douglas said the move was not performance related ``but simply a rebalancing.''
Arlington County Retirement System, Arlington, Va., is searching for small- and mid- to large-cap U.S. equity managers. Finalists will be interviewed at the next meeting, but other details were not made public. Ashford Consulting is assisting.
The $800 million fund also allocated an additional $3 million to Wertheim Schroder in an emerging marke ts portfolio, raising the allocation to $40 million, and will allocate an additional $5 million to Loomis, Sayles, for U.S. bonds.