Police and Firemen's Disability & Pension Fund of Ohio, Columbus, terminated its existing large-cap stock managers and is seeking managers to run a total of $2 billion.
Let go were: growth managers Atalanta/ Sosnoff and Bond Procope; value managers Value Line and Lakefront; and value-oriented core manager Oppenheimer. The firms, which managed a total of $1.35 billion, were let go for various reasons, including poor performance, said Allen Proctor, executive director.
Also, small-cap growth manager Invesco was placed on probation after a reorganization at the firm. Mr. Proctor said there have been no problems with performance.
Nate Carter, president and CIO of Lakefront, said the firm's large-cap performance will stand on its own. Alan Bond, CIO of Bond Procope, said his firm ranked in the second quartile for the past two years. Officials at the other firms could not be reached by press time.
The $7.2 billion fund will issue RFPs for large-cap growth and large-cap value mandates of $500 million each and a $1 billion S&P 500 index portfolio. It also will issue an RFI for an EAFE index manager. No timetable has been established. Wilshire is assisting.
Consolidated Rail Corp.'s pension fund's $52 million managed futures allocation returned 21% in 1997, while the $2 billion fund overall returned 19%, said Thomas J. Convoy, assistant treasurer-investment relations and pensions. Since it was established in 1994, Philadelphia-based Conrail's managed-futures portfolios reduced volatility of the fund by six basis points, but also reduced return by about two basis points, he said.
Associated Estates Realty, a REIT, plans to buy MIG Realty Advisors, a pension fund real estate money manager for $306 million in cash and common stock.
MIG will contribute 11 of the 36 apartment communities that it manages for tax-exempt investors to the REIT, said Barbara E. Hasenstab, director of investor relations. Another 22 communities will be managed by MIG Realty Inc., a wholly owned subsidiary of Associated Estates. It is not known who will manage the rest of the properties.
Florida State Board of Administration, Tallahassee, terminated Barnett as a small-cap value manager because of Barnett's recent purchase by NationsBank.
NationsBank did not offer the same product, said Lan Janecek, chief of equities for the $74 billion fund. The $30 million portfolio could be placed in the internal equity asset allocation portfolio or in the co-investment private equity program with Landmark.
Bullish on the U.S. stock market, Abby Joseph Cohen, co-chair investment policy committee at Goldman Sachs, predicts above-average returns for 1998.
Speaking today at a risk management conference in Miami sponsored by the CBOE, CBOT, CME and LIFFE exchanges, she said large-cap stocks will return 12% and small-cap stocks 15% for the year. She predicts that, at year end, the Dow Jones industrial average will be at 8,700, and S&P 500 at 1,075 and the Nasdaq composite at 1,776.