The Federal Reserve Board Open Markets Committee, meeting today, left short-term rates unchanged. The discount rate was left at 5% and the fed funds rate, which fluctuates daily based on demand and market conditions, at a target 51/2%.
``It was what we expected,'' said Thomas J. Marthaler, vice president and fixed-income portfolio manager, Chicago Trust. ``Inflation remains in line with their assessment, maybe even a little lower.'' It is now around a 2% annual rate, he added.
The PBGC is taking over the pension plan of Allis-Chalmers Corp., West Allis, Wis. The plan has $209 million in assets and $272 million in liabilities. The PBGC's action covers nearly 9,000 former workers and pensioners.
The company now has 40 active workers, only five of whom are covered by the plan.
The company, which has not made any contributions to its plan since January 1996, asked the PBGC to take over the plan. The PBGC previously had taken over 11 Allis-Chalmers pension plans that were shut down in 1985.
State of Michigan Retirement Systems, Lansing, paid $150 million for an undisclosed stake in Edens & Avant, a real estate operating company, said Phil Van Syckle, head of mortgage and real estate for the $35 billion pension fund.
Edens & Avant operates shopping centers in the Southeast, said Joe Edens, chairman.
Harvard University's $11 billion endowment fund posted a total return of 25.8%, net of all expenses, for the year ended June 30, according to a letter to alumni from Jack Meyer, president of Harvard Management, Boston, which manages Harvard's assets.
The median return of large endowment funds in the Trust Universe Comparison Sevice was 20.3%. Harvard's benchmark policy portfolio returned 20%. For the five-year period ended June 30, the endowment returned 18.9%, compared with 14% by the TUCS universe.
But Mr. Meyer ended his letter with a caution: ``We do not expect the five-year record ... to be sustained.''
Pioneer Group formed Pioneer Global Institutional Advisors, a new unit that will centralize services to institutional investors. The new group will take over the company's existing institutional marketing, client reporting and product development. It also will pull together Pioneer's institutional activities in international real estate, venture capital and capital markets investing and expand the firm's product line.
However, Pioneer Capital, which focuses on the U.S. venture capital market, will remain a separate subsidiary, according to a company statement.
New York City Deferred Compensation Plan hired ICMA as its education and communication vendor. The firm replaces FASCorp., which will continue to provide record-keeping services for the $2.5 billion plan. ICMA will conduct various presentations for current plan participants and potential new enrollees. Mercer assisted.
West Virginia Investment Management Board, Charleston, is searching for an investment consultant to help the $4.3 billion fund move into equity investments, said David H. Gardner, chairman of the investment committee. The fund will send out RFPs to a short-list of consultants it will review Oct. 7, and present to the board at its meeting Oct. 14.
The move follows the passage of a statewide referendum Sept. 27 that lets the state invest in stocks for the first time.