International Paper Co., Purchase, N.Y., reduced its exposure to U.S. stocks to 39% from 57% for its $4 billion pension fund and is hiking its exposure to non-U.S. stocks to 23% from 8% as a result of a recently completed asset allocation study, said Robert Hunkeler, vice president and director of investments. The fund also is adding three asset classes: midcap domestic stocks, small-cap U.S. stocks and emerging markets equities.
Its 39% U.S. stock allocation includes 27% in large-cap stocks (including 15% in company stock), 7% in small-cap stocks and 5% in midcap stocks. The international allocation includes a 5% allocation to emerging markets.
The pension fund also is lowering its target for U.S. bonds to 21% from 31% and lifting the target for international bonds to 7% from 4%.
The fund will target the remaining 10% of its portfolio for real estate and cash. While the fund has completed revamping its domestic stock portfolio, and is tackling its international stock portfolio next, it has not yet begun revamping its bond portfolio.
Washington State Investment Board, Olympia, terminated Cursitor-Eaton as its global tactical asset allocator. The firm ran a total of $385 million. The board has not yet specified where to reallocate the assets. The action follows a board decision to drop the global TAA strategy, said James Parker, executive director for the $40.5 billion fund.
Separately, fund officials approved up to $100 million to be committed to the Doughty Hanson & Co. III Fund, a European private equity fund, and up to $75 million to be committed to the BC European Capital VII, a European buy-out fund. The funding for the commitments will come from cash. John Hancock assisted with the hiring of Doughty Hanson and Brinson Partners with the addition of BC European.
The Council of Institutional Investors today released its ``focus list'' of 20 companies that have underperformed their industry groups for the one- and five-year periods ended July 31. The companies are:
Adobe Systems; Amdahl Corp.; Apple Computer Inc.; Charming Shoppes Inc.; Cooper Industries Inc.; Countrywide Credit Industries; Digital Equipment Corp.; Dillard Department Stores Inc.; EG&G Inc.; Fleming Companies Inc.; Golden West Financial Corp.; Great Lakes Chemical Corp.; Kmart Corp.; Loews Corp.; Mallinckrodt Group Inc.; Navistar; Novell Inc.; Pall Corp.; Salomon Inc. and United States Surgical Corp.
