The merger of Zurich Insurance with the financial services business of B.A.T. Industries, announced today, will create one of the world's top 10 money managers, with $342 billion in assets under management.
The new entity, Zurich Financial Services Group, will have about $200 billion in externally managed assets, including the pending acquisition of Scudder, Stevens & Clark.
Zurich Insurance shareholders will own 55% of the new company through a wholly owned entity called Zurich Allied AG. B.A.T. will be split into two entities: Allied Zurich, which will own 45% of the new financial services company, and British American Tobacco.
Zurich Insurance, with a total of $262 billion in assets at year-end 1996, will be augmented by nearly $80 billion in assets from B.A.T., which chiefly manages sister company life insurance assets.
McGraw-Hill Cos. will acquire Micropal Group, the London-based performance measurement firm. Terms of the deal, expected to close in November, were not disclosed.
The firm will be renamed Standard & Poor's Micropal. Christopher Poll, Micropal's founder, will retire as chairman, but will serve as consultant. Mark Adorian, now responsible for Micropal's day-to-day activities, will head the group.
Chicago Municipal Employees Annuity & Benefit Fund will conduct a manager structure analysis in preparation for an asset allocation study next year.
Fund officials want to ``see who our managers are and where the holes are,'' said Ed Burke of Becker, Burke Associates, the fund's consultant. The $4.7 billion fund's asset mix is 55% U.S. equity, 35% to 40% U.S. bonds, and a total of 10% in venture capital, real estate and international equity. Trustees continue to consider an allocation to managed futures and have talked to RXR, Dean Witter, Baldwin and Kenmar, said James Stack, executive director.
FIMALAC agreed to acquire Fitch Investors Services from Van Kampen Group and other investors and merge it with IBCA Ltd., the London-based credit rating agency controlled by FINALAC. The new company will be called Fitch IBCA. The terms call for a new U.S. company controlled by FIMALAC to buy Fitch for $175 million in cash.
Massachusetts Pension Reserves Investment Management Board, Boston, is having detailed discussions with money managers about how the $20 billion fund can get out of tobacco stocks without disrupting performance.
Acting Gov. Paul Cellucci this week signed legislation that requires PRIM to stop buying tobacco stock in 90 days and to divest of all tobacco holdings within three years. PRIM Acting Executive Director Scott Henderson said the fund has about $230 million in tobacco investments in all asset classes.
A study will have to be done on all investments to uncover tobacco revenues, and PRIM may consider developing a database to track compliance. PRIM probably will move quickly to divest, not wait three years, he said.