Equity allocations by the nation's largest 200 pension funds
topped 60% for both defined benefit and defined contribution plans,
their highest levels ever, according to Pensions & Investments'
Among the largest 200 pension plan sponsors, the aggregate equity allocation (U.S. and non-U.S.) for defined benefit plans rose to 60.1% as of Sept. 30, a rise from 56.2% a year earlier. The aggregate equity allocation for defined contribution plans rose to 67.5% as of Sept. 30, an increase from 58.6%.
After taking into account the rise of the S&P 500 stock index, the survey shows the largest 200 pension plans pulling about $140 billion out of the U.S. stock market in the one-year period.
In addition, the 200 biggest pension funds continued to increase defined benefit money invested in alternative assets, but at a much slower pace, according to the survey.
Equity real estate investments grew by a market-adjusted 3% to $73.8 billion for the year ended Sept. 30.
Money invested in buyout, venture capital and private equity partnerships also increased, although accounting for growth and declines is difficult because of the lack of a wi dely accepted benchmark. The amount of money invested in buyouts by the top 200 funds grew 30% to $17 billion for the year ended Sept. 30. Money invested in venture capital increased 25% to $13.3 billion. The overall amount investe d in private equity decreased slightly to $12.31 billion because of a decline in U.S. private equity, but money in international private equity rose 64%.
Cross-border investments by U.S. tax-exempt institutions grew 11% in 1997, reaching $528 billion, according to an estimate by InterSec Research.
The firm said its estimated $40 billion net cash flow into cross-border investments last year was well below the previous year's $50 billion level, but is in line with 1994 and 1995.By InterSec's calculations, tax-exempt institutions' cross-border investments totaled 9.6% of total assets at the end of 1997. That percentage is below the level at both
year-end 1995 and 1996, when cross-border holdings as a percentage of
total assets were 9.9% and 10.9%, respectively.
Banc One Investment Management and Invesco formed a joint venture to provide full-service bundled 401(k) services. Banc One will be responsible
for sales, marketing and participant education. Invesco will provide
administration and record keeping for the venture, known as Pathways
to Retirement with Banc One SM. A total of 28 mutual funds will be
available, including 14 Banc One funds and a combination of 14 funds from Invesco, PRIMCO and the AIM family of funds.
Alpine Management & Research, a new money management firm, will open its doors next month offering two existing mutual funds. The firm's founding pa rtners, Samuel A. Lieber and Marc R. Halle, managed the $36 million Evergreen U.S. Real Estate Fund and the $37 million Evergreen Global Real Estate Fund.
When the two left Evergreen Asset Management, they made a deal to buy the f unds and bring them under their own banner at Alpine. The terms of the mutual fund purchases were not disclosed. .