Travelers' acquisition of Salomon would bring together eight small to midsize pension fund investment managers, catapulting them as a group to be one of the largest active managers with nearly $50 billion in tax-exempt assets.
Travelers and its Smith Barney unit own Smith Barney Capital, Smith Barney Investment Advisors, Greenwich Street Advisors, First Madison Advisors, Peachtree, Travelers Insurance and Travelers Investment Management. Salomon owns Salomon Asset Management and has a stake in Mastholm Asset Management.
The group also would have the Smith Barney Consulting, which serves as a fiduciary with discretion to pick money managers for some $100 billion in assets of tax-exempt clients.
The Travelers-Salomon deal could affect an alliance between Fidelity and Salomon. Salomon agreed to become a major source of research for Fidelity Spartan Brokerage and give Fidelity access to Salomon-managed IPOs. Travelers, with its Smith Barney brokerage subsidiary and mutual funds, likely will review this arrangement.
Travelers and Salomon executives could not be reached for comment.
New York City Employees' Retirement System's investment committee voted to allocate an additional $100 million to the Chase Community Development Corp. Multi-Family Home Project, a program that rehabilitates buildings in New York City, said Adam Barsky, acting chairman of the board of the $45 billion fund. The retirement system previously invested $100 million with Chase.
Trustees also hired Robinson, Silverman, Pearce, Aronsohn & Berman, a law firm that will advise the system on its investments in tobacco stocks, said Mike Musuraca, a trustee and head of the system's tobacco committee. NYCERS has about $360 million invested in tobacco stocks.
Greater Kansas City (Mo.) Foundation, is 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 follows the termination of balanced manager Boatmen's Trust because of its purchase by NationsBank. Boatmen's managed $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.
Pennsylvania Municipal Retirement System, Harrisburg, started a search for its first timberland real estate manager, which will manage $20 million. Trustees of the $800 million fund approved the search to help round off the real estate allocation at 10% of total assets. The funding for the new manager is expected to come from cash.
