TALLAHASSEE, Fla. - The Florida State Board of Administration formed Co-Investment Partners LP, a captive private equity co-investment partnership through which the pension fund will co-invest with private equity general partners, said William Bell, chief of management policy for the $72 billion pension fund.
The new partnership will be managed by CIP Partners. Florida's captive co-investment program has an initial commitment of $250 million that can grow to more than $1 billion. CIP Partners has full discretion to commit to deals ranging in size from $20 million to $75 million, said Irwin Loud, manager-private equity investments. The general partner also must co-invest in each deal, he said.
Los Angeles Archdiocese
plans equities hike
LOS ANGELES - The Archdiocese of Los Angeles will boost its equity allocations as a result of a major asset allocation study for its combined $500 million pension and endowment funds, said Jose Debasa, chief financial officer. The plan will raise domestic equity to 48% of total assets from 40% and international equities to 17% from 15%, including a boost in emerging markets to 2% from 1.1%. It will keep U.S. long-term bonds at 31%, while reducing short-duration bonds to 4% from 16%.
The archdiocese plans to make the shifts over six months using existing managers. It has five U.S. equity managers, including one that also is its sole international equity manager; two long-term bond managers; and one short-duration manager. All managers will be retained.
Asset Strategy Consulting is assisting.
Stanislaus County delays
small-cap manager search
MODESTO, Calif. - The $775 million Stanislaus County Retirement Association is postponing its small-cap equity manager search for at least another four or five months.
The board is reviewing some of its internal procedures, such as guidelines followed for reviews of services provided by managers, actuaries and consultants; searches; asset allocation reviews; and additions of new asset classes, said Robert Harmon, retirement manager. It might be early summer before the board discusses the issue of a small-cap search again, Mr. Harmon added.
AAA Michigan to lower global bond holdings
LIVONIA, Mich. - AAA Michigan plans to reduce the global bond allocation for its $250 million pension fund to 5% from 15% of the total fund, said J. Terry McElroy, vice president, chief financial officer and treasurer. The allocation is run by several managers.
The fund could reallocate the proceeds to U.S. stocks and bonds, although a decision hasn't been made. No managers will be changed.
Employers spending less on retiree health
WASHINGTON - Large employers are spending less on retiree medical benefits than they did five years ago, largely because of benefit cuts, according to a new study by William M. Mercer.
The number of large employers offering retiree medical benefits declined to 31% for Medicare-eligible retirees in 1997 from 40% in 1993; the number dropped to 38% for early retirees (younger than 65) from 46% in 1993, according to the study.
Proposal seeks deduction
of Social Security tax
WASHINGTON - Sen. John Ashcroft, R-Mo., has unveiled a tax reform proposal that would let workers deduct their Social Security payroll taxes from their income taxes. The proposal also would end the income tax older Americans must pay on Social Security benefits.
The Ashcroft proposal also would double the amount of contributions workers can make to their individual retirement accounts, to $4,000 from the current $2,000.
Merrill Lynch launches
socially targeted fund
NEW YORK - Merrill Lynch has introduced the Principled Values Portfolio, a socially responsible diversified stock portfolio in the Merrill Lynch Defined Asset Funds family.
The portfolio was developed with the help of Kinder, Lydenberg, Domini & Co. The Cambridge, Mass., firm specializes in research and analysis of companies that meet particular social criteria, such as environment, community involvement, product safety and diversity in the workplace.
Companies included in the portfolio derive little or no revenue from manufacturing tobacco or alcohol products, gambling, military contracting and nuclear power.
Banc One, Invesco team
for bundled services
COLUMBUS, Ohio - 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.
Twenty-eight 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.
Fixed annuity added
to Pegasus line
CHICAGO - Western National Life Insurance and First Chicago NBD Investment Management collaborated in development of the Pegasus Flex-Choice Annuity, a fixed annuity retirement savings vehicle.
First Chicago NBD is the investment manager of the annuity and will manage the assets in intermediate term, high-quality fixed-income instruments. Western National Life is the underwriter.
The new annuity broadens First Chicago NBD's Pegasus line of mutual funds and other retirement savings vehicles.
Asia woes not seen
hitting U.S. profits
DURHAM, N.C. - Most U.S. CFOs aren't worried about how the Asian market turmoil will affect their companies, according to a survey.
In the Financial Executives Institute/Duke-Fuqua School of Business corporate outlook survey, 63% of U.S. chief financial officers predict the troubles in Asia will have no effect on their companies' profits during the next year. But some 16% of the executives, including those at one-third of the manufacturers, said they expect downward pressure on the prices of their products, because of the Asian problems.
The respondents also expect the heavy pace of merger and acquisition activity to continue in 1998, but at a slightly slower pace than in 1997.
Schwab posts 24% hike
in revenue in '97
SAN FRANCISCO - The Charles Schwab Corp. announced 1997 revenue was up 24% to $2.299 billion from $1.851 billion in 1996. Total assets administered and managed by the firm exceeded $350 billion at year-end 1997. The firm had $69 billion in net new assets and 1.2 million new customer accounts in 1997.
Mutual fund service fees and net interest revenue each grew 38% from 1996 levels. Schwab's bundled retirement plan business grew 48%, with defined contribution plan assets totaling $15 billion compared with the previous year. Assets in Schwab's proprietary mutual funds grew to $56 billion.
university system cuts equity managers
RENO, Nev. - University and Community College System of Nevada, Reno, terminated Pacific Financial Research and Anderson Hoagland as equity managers for the system's $363 million combined endowment and operating funds.
The $23 million in large-cap growth equity managed by PFR and the $10 million in large-cap value equity run by Anderson Hoagland will be split between existing index managers Grantham, Mayo, Otterloo and Vanguard.
The terminations were not performance related, but part of the system's ongoing manager consolidation, said Tim Ortez, director of banking and investments. Cambridge assisted.
