The California State Teachers' Retirement System's staff is recommending the fund continue active domestic equity management with a 20% target allocation and range of 15% to 25% of assets.
The fund's board has been considering whether to adopt an all-passive strategy or continue with a small percentage in active U.S. equity. The Sacramento-based fund has 10.6% of its $28.3 billion in active U.S. equity assets.
The staff's recommendation is supported by the $80 billion fund's general pension consultant, Pension Consulting Alliance. The board is expected to make a decision next week.
A group of lawmakers headed by Rep. David Minge, D-Minn., yesterday introduced a bill that would use projected federal budget surpluses to shore up the Social Security system. The bill would prevent lawmakers from tapping any projected budget surpluses for tax cuts or spending increases unless that surplus is not based on using Social Security funds to balance the budget.
Some economists predict a federal budget surplus of as much as $50 billion by 2002, or earlier, a spokeswoman for Mr. Minge said.
Aurora (Ill.) Police & Fire Pension System is considering moving up to 35% of its $104 million fund into equities because of new state legislation that expands the investment authority of police and fire funds.
Currently, the fund only invests in Treasury bonds and bills with 1838 Investment Advisors and Zurich Investment. Officials will meet at the end of October to discuss possible strategies. Smith Barney is the fund's consultant.
City of New Orleans Employees Retirement System will add a small-cap value equity manager by the end of this year, said Jerry Davis, chairman of the investment board of the $316 million system.
Mr. Davis said the small-cap manager will invest between $10 million and $25 million to be reallocated from existing equity managers and cash. The search will be conducted by Dean Witter, but will not involve sending RFPs.
GLOBALT introduced a new separate account strategy - the ``20 Best'' Concentrated Portfolio. The strategy's objective is to provide excess return over broad market benchmarks by actively managing a concentrated portfolio of about 20 of the best stocks from GLOBALT's other portfolios. The new strategy is designed for institutional investors with a minimum investment of $10 million.
GLOBALT manages stocks of large-cap U.S. companies that derive a high percentage of revenue from non-U.S. sources.
San Francisco City and County Employees' Retirement System is searching for an enhanced S&P 500 index fund manager, said Carl Wilberg, portfolio manager-equities. RFPs are due Oct. 24. The $8.7 billion fund will consider both fundamental-based and derivative-based methodologies.
The new manager will be assigned $200 million. The staff hopes to recommend finalists to the board in December and schedule presentations in January.
Funding will come from an in-house enhanced index fund, which will be dropped.
Asset Strategy Consulting is assisting.
Affiliated Managers Group Inc. closed its previously announced purchase of slightly more than 50% of GeoCapital. This is the ninth investment for AMG.
GeoCapital, which has $2 billion under management, specializes in growth equities and small-cap companies.