CHICAGO - The Public School Teachers' Pension and Retirement Fund of Chicago terminated Chancellor LGT as a U.S. large-cap growth equity manager, sharply cut back the portfolio of large-cap value manager Oppenheimer Capital and moved the money to other firms.
Chancellor had managed $438 million, while Oppenheimer managed $130 million for the $8.1 billion system. Oppenheimer retains $2 million.
The system is hiring Morgan Stanley and ABKB/LaSalle as public REIT managers handling $58.33 million each, to be funded by rebalancing. Small amounts of additional assets are going to three large-cap growth equity managers: Fidelity will now manage $40 million; Holland, $5 million; and Zevenbergen, $10 million.
On the fixed-income side, ANB will receive an additional $203 million, boosting its indexed portfolio to $442 million. Miller, Anderson & Sherrerd and Wellington each will get $101 million, bringing their portfolios to about $220 million.
The board also approved beginning a search for additional emerging minority managers. The fund has earmarked up to $60 million for the new mandates.
The reason for Chancellor's termination was professional turnover and other issues. William M. Mercer recommended the move.
"We are very disappointed to lose them as a client. They have been a valued client and we hope to have the opportunity to work with them in the future," said Alex Trower, Chancellor spokesman.
Risk-adjusted measurement for securities lending
BOSTON - State Street Corp. is planning a new risk-adjusted performance measurement system for its securities lending activities, said Ralph Vitale, executive vice president of State Street's global securities lending division.
While capabilities will be added over time, the first phase (after beta testing) will make its debut in January. Initially for its large securities-lending clients, State Street will provide a value-at-risk assessment, which will allow clients to compare their earnings from securities lending with the amount of risk being taken in the process.
State Street also soon will be able to provide this risk-adjusted assessment to clients who also use other securities lenders.
State Street has 205 securities-lending clients.
Equitable gives employee stock options
NEW YORK - The Equitable Cos. is extending stock option grants to employees at all levels of the company and not just upper management as was its previous practice. Some 4,000 full- and part-time employees as well as 583 managers are eligible to receive at least 100 Equitable shares under this one-time grant, for a total of about 2 million options. The option price is $42.56. The options have a 10-year term and vest over a period of three years.
Calpers increases U.S. equity allocation
SACRAMENTO, Calif. - California Public Employees' Retirement System raised its U.S. equity allocation to 41% from 38%. The fund also reduced its alternative investment allocation to 4% from 5%. It also reduced its cash allocation to 1% from 2% and its real estate allocation to 6% from 7%.
U.S. bonds remain 24%; non-U.S. stocks stay at 20%; international bonds will continue to be 4%. The changes were made because the $124 billion fund wanted to increase its investment in U.S. equities.
WASHINGTON STATE TERMINATES ALLOCATOR
OLYMPIA, Wash. - Washington State Investment Board terminated Cursitor-Eaton as global tactical asset allocator.
The firm managed a total of $385 million, which the board has not yet specified where to reallocate. The action follows a board decision to drop the global TAA strategy.
Originally, the board planned not to renew Cursitor's contract, which would have been up in March 1998, but decided to take action sooner, 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 buyout 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.
