SSgA linking up with Italian firm
BOSTON -- State Street Global Advisors signed an alliance with Mediolanum SpA, an Italian financial services group, to pursue Italy's corporate and industrywide pension fund management business. The firms will provide Italian pension fund sponsors with asset management and reporting, consulting and education and communication for plan participants.
The two firms will bid for the pension fund mandate of FondChim, an Italian chemical group. Eventually, a 50/50 joint venture called Mediolanum State Street will be launched.
Mediolanum specializes in life insurance and mutual funds, with about $7.5 billion under management. State Street Global Advisors has $379 billion under management.
LIFFE plans conversions for start of EMU
LONDON -- The London International Financial Futures Exchange announced plans related to the planned Economic and Monetary Union, including provisions for converting contracts into euros, and a reduction in the value of its FTSE 100 contract.
LIFFE made provisions for allowing the conversion of existing short-term interest rate futures and options contracts into the new euro currency on a voluntary basis.
The provisions are designed to allow for two scenarios: a successful and irreversible EMU, as well as a breakup of EMU once its in place.
The index value of the FTSE will drop to L10 from L25 beginning with the June 1998 contract, while the coupon rate used for calculating the value of its long gilt contract will drop to 7% from its current 9%, also starting with the June 1998 contract
In addition, LIFFE will introduce a five-year U.K. gilt futures contract and, in order to better compete with the over-the-counter market, will allow for half-point pricing on selected currency contracts.
State Street gains trustee business
LONDON -- State Street Bank and Trust agreed to acquire Bank of Scotland's trustee business for unit trusts, helping fill out State Street's mutual fund services in the rapidly growing area. Terms were not disclosed.
Subject to regulatory approval, the business, involving L13 billion (U.S.$21.5 billion) in unit trust assets, will be transferred to State Street's Edinburgh operations.
Rubenstein takes post at Morgan Stanley Group
LONDON -- Alan Rubenstein left his post as managing director and CEO of LucasVarity Fund Management Ltd., London, to take a new position as a managing director at Morgan Stanley Group (Europe) P.L.C. Dec. 1.
Mr. Rubenstein will market Morgan Stanley's full range of services and products to European pension funds, bridging the firm's money management, custody, stock lending and fixed-income services, among others.
Mr. Rubenstein also will serve as a liaison with European governments on pension reform issues.
Mr. Rubenstein, who oversaw a restructuring of the Lucas pension fund last year before the parent company merged with Varity, has not yet been replaced.
The combined U.K. fund has L3.5 billion ($5.64 billion) in assets.
UIM opens N.Y. office to target U.S. institutions
NEW YORK -- Unibank Investment Management is now offering international equity investment management service to institutional investors in the United States through its New York office. UIM manages about $10.7 billion in equity and fixed-income accounts, primarily for institutional and mutual fund investors, and has offices in Copenhagen and Stockholm. The parent, Copenhagen-based Unibank A/S, is one of Scandinavia's largest institutions.
UIM's core product, European equities, has returned a compound 18.1% for the five-year period ended June 30. UIM is after a portion of the international equity investments made by U.S. institutions that is expected to reach a total of $295 billion by next year, UIM said.
Investment fund targeting Indian stocks is launched
WASHINGTON -- International Equity Partners, Washington, in partnership with the J.M. Financial Group, an Indian investment advisory firm, launched the Indian Equity Fund, an open-end investment fund for institutional investors interested in investing in Indian stocks.
The fund intends to invest in the most attractive stocks within the IFC Investible India Index, which includes 78 of the largest and most liquid Indian stocks.
State Street Mansion House sets China fund venture
HONG KONG -- State Street Mansion House Investment Management Services will form a joint venture with Guangdong Overseas Chinese Trust & Investment to seek a license to distribute mutual funds in China.
Under the agreement, SSMH will work with Guangdong Overseas to obtain regulatory approval to distribute mutual funds in Guangdong province, adjacent to Hong Kong.
SSMH is a joint venture company formed earlier this year by State Street Bank and Mansion House Group in Hong Kong. It offers asset management services in Hong Kong, China and nearby regions.
Morgan launches expanded emerging markets index
NEW YORK -- J.P. Morgan launched a new performance index, the Emerging Local Markets Index Plus, which tracks total returns for local currency-denominated money market instruments in 24 countries. It is an expansion of the existing ELMI index, which includes 10 countries. J.P. Morgan officials said the new index is easier for fund managers to replicate.
Church of England hires Mercury
LONDON -- The Church of England Pensions Board has hired Mercury Asset Management to run half its pension assets, said Stephen Eagleton, chief accountant.
The change stems from creation of a new pension fund for clergy Jan. 1, 1998.
Pension benefits for clergy have been paid out of church assets, but real estate losses led to formation of a separate fund covering future accruals.
Annual contributions of L30 million to L32 million to the new fund, added to the existing L150 million ($245 million) fund for lay workers, made it worthwhile to split the assets between two managers, Mr. Eagleton said.
PDFM Ltd., previously the sole manager, will split existing assets and new contributions with MAM. Halving of PDFM's mandate was not performance-related, he said.
Lane, Clark & Peacock, London, was the consultant.