New England Investment Cos. will purchase investment manager Daniel Breen & Co., which has $2.4 billion in assets under management, and merge it with existing NEIC affiliate Vaughan, Nelson, Scarborough & McConnell. Terms were not disclosed.
The new entity, to be called Vaughan, Nelson, Scarborough & McCullough, will have $4 billion in assets and be led by Eugene Vaughan Jr., now president and CEO of Vaughan Nelson. Edward S. McCullough, president and CEO of Breen, and J. Frank Scarborough, principal of Vaughan Nelson, will become managing principals of the new firm. The new firm will offer equity and fixed-income management and trust services.
The move will bring NEIC's total assets under management, through affiliates, to $121 billion.
San Luis Obispo County Employees' Retirement System, San Luis Obispo, Calif., plans to double its allocation to equities under a new asset mix, said Tony Petruzzi, executive secretary. The $300 million fund, now internally managed, might eventually seek the use of outside managers for a portion of the fund.
Such a recommendation could be made to the board before the end of the year. The new allocation, which the board hopes to fund over five years, is 40% equities, 50% fixed income, 10% real estate. The old mix was 20% equities, 70% bonds, 8.5% real estate and 1.5% cash.
Gabriel Roeder & Smith, the fund's actuarial firm, assisted.
Greater Kansas City (Mo.) Foundation, is in the process of evaluating fixed-income managers and possibly will add a passive bond manager before the end of the year with an initial allocation of $7 million. The decision to look into a laddered passive fixed-income approach comes following the termination of balanced manager Boatmen's Trust because of its purchase by NationsBank. Boatmen's ran $65 million for the foundation.
The $422 million foundation recently hired State Street Global to run $35 million in an S&P 500 index fund in a reallocation of part of Boatmen's portfolio. The disposition of the rest of Boatmen's assets has not been decided.
The average total compensation package for mutual fund company CEOs this year is a bit more than $1 million, less than a 1% raise from 1996. The average total compensation across the mutual fund industry increased an average 3.8%, according to a survey by Buck Consultants. By contrast, COOs saw compensation leap 18% to an average $766,000, while chief administrative officers received compensation increases of 23% to an average package of $225,700.
The heads of taxable bond investment had total compensation decreases of 37% to an average of $540,200 and heads of tax-exempt securities saw decreases of 15.5% to an average $375,900 in their compensation.