State Universities Retirement System of Illinois, Champaign, will end currency hedging for its $9 billion pension fund early next year, said John R. Krimmel, associate investment officer.
Mr. Krimmel said trustees concurred with staff and consultant findings that hedging provided little benefit to the system. The system estimates the hedging cost $1 million a year.
The system had hedged 50% of the currency exposure of its $740 million in active non-U.S. portfolios and 50% of its $763 million in international index funds. Active international managers, however, will be allowed to hedge currency on a defensive basis.
Chicago Municipal Employees Annuity & Benefit Fund's board of trustees will hear a presentation from Becker, Burke on changing the fund's asset allocation at its Jan. 20 meeting. The presentation is part of the system's 1998 asset allocation study.
Decisions on its future money manager lineup and whether searches will be needed are expected to be made at the board's April 16 meeting. The $4.6 billion fund's current allocation is 52.9% U.S. stocks, 3.3% international stocks, 34.2% U.S. bonds, 0.1% convertibles, 4.3% cash, 2.4% real estate and 2.8% venture capital.
Palley-Needelman Asset Management is interested in buying a value-oriented investment management firm that will either broaden Palley-Needelman's product line, provide distribution to different markets, add talent or help develop a subadvisory private label product, said Chet Needelman, CEO.
The firm is a value-oriented active equity and fixed-income manager with about $5 billion in assets under management. Mr. Needelman said the transaction could be in cash or Palley-Needelman stock.
Barclays Global debuted a new international equity commingled fund, the BGI All Country World Index ex-U.S. Fund. The BGI ACWI ex-U.S. is benchmarked to the MSCI All Country World Index, which incorporates all 46 equity markets outside the U.S.
The fund's structure is unusual: each of the 46 equity markets is represented by an individual fund. Investors can, therefore, customize the index to overweight or underweight particular markets.