Bell Atlantic Corp., Philadelphia, will use a comprehensive futures-based strategy to ease the transition when the former NYNEX Corp. pension fund is merged with Bell Atlantic's fund Jan. 1.
The strategy has been used in connection with NYNEX's passively managed internal operation for seven years and its active outside managers for five years. The futures strategy has allowed the fund to maintain its target asset allocation without disturbing outside managers; to remain fully invested; and to provide cash for benefits payments as needed.
As of Sept. 30, total combined assets of the two plans exceeded $51 billion. Around $35 billion of that is in the two defined benefit plans, which will be merged first. Around 15% to 20% of those assets will continue to be managed internally, said Candace Cox, president of Bell Atlantic Asset Management.
Tucson Supplemental Retirement System will move some of its bond portfolio to an outside manager and add a small-cap equity manager.
The entire $95 million bond portfolio is now managed internally. Between $25 million and $30 million might go to an outside manager. The size and investment style of the small-cap portfolio have yet to be decided and will be discussed along with the bond manager search criteria at the board's Jan. 22 meeting. The fund will conduct manager searches after that meeting, said Mike Parisi, treasury administrator.
The decision follows the $380 million fund's allocation study done by Hewitt.
The board also approved a 5% allocation to emerging markets. The fund has to get approval from the mayor and City Council to invest in the asset class. That approval could come as early as February.
Jones Lang Wootton Realty Advisors' senior managers completed the purchase of the firm's minority partner, Jones Lang Wootton, and renamed the firm Clarion Partners. Clarion manages more than $5 billion for pension funds and wealthy individuals.