3 on probation
The $3.2 billion Philadelphia Municipal Pension Fund placed three managers -- Smith Graham, Brown Capital and Provident Capital -- on probation.
The fund also hired Turner Investment as a small cap-growth stock manager for $30 million and Denver Investment as a small-cap value manager. Turner's portfolio will be funded from assets now in the Bankers Trust Small Cap Growth Index fund. The size and funding source for Denver's portfolio were not available.
The fund also will invest between $5 million to $10 million in Keystone Ventures V, a venture capital fund.
Smith Graham, which has a $120.5 million intermediate bond portfolio, "continues to struggle," the minutes of the fund's Feb. 23 meeting said. Brown, which runs $107.2 million in large-cap U.S. growth stocks for the fund, "struggled due to its smaller market-cap bias" and its sector weightings. Provident, a large-cap U.S. value stock manager with a $100 million portfolio, "had poor sector and stock selection decisions," the minutes said.
Officials at Brown declined to comment; Smith Graham and Provident officials did not return calls seeking comment.
Completion fund added
The $129 billion California Public Employees' Retirement System hired Richards & Tierney to create a completion fund.
The fund will be designed to fill in the style gaps left after CalPERS' recent hiring of 10 domestic equity managers.
CalPERS hasn't determined the size of the fund, although a spokesman said it likely will be less than $4 billion. CalPERS will manage the fund in-house.
The fund will offset style risk of the new managers, which were assigned almost $9 billion in total. As a group, the completion fund and managers will be benchmarked to beat the S&P 500.
Securities regulators like what they see in the Council of Institutional Investors' new soft-dollar guidelines.
The guidelines "had some wonderful statements in there which are hard to argue with," said J. Douglas Scheidt, chief counsel in the SEC's division of investment management. The council presented its concerns on soft-dollar arrangements and its new soft-dollar guidelines to regulators last week.
The guidelines urge a separation of investment research costs from the cost of trading securities, and reminds members that in using soft dollars or commission recapture programs, "it is the duty of fiduciaries to ensure that all such practices are engaged in for the exclusive benefit of the plan and its members."
IBJ Schroder Bank & Trust acquired Delphi Asset Management, an investment manager with about $1 billion in assets under management. Terms were not disclosed.
About 10%of Delphi's assets are managed for foundations; the rest are high-net-worth clients.
IBJ Schroder indicated it intends to pursue more aggressively the U.S. institutional market this year.
Hong Kong OKs fund
Hong Kong's Mandatory Provident Fund was given the go-ahead April 1, with the scheme due to be set up early next year.
Legislative councillors also voted against controversial, and potentially time-delaying, proposed amendments to the government's investment regulations for the scheme, which is expected to see around HK$12 billion in its first year alone.
The next step will be creation of an MPF Authority, once legislators approve a HK$5 billion funding application.
Utility reorganizes fund
Oklahoma Gas & Electric hired three managers in a reorganization of its $260 million defined benefit fund.
Hired were: Chicago Trust for a $50 million active U.S. bond mandate; American Advantage Fund, international equities, for a 10%allocation of the total portfolio; and Shapiro, to run 10%in small-cap value.
Fund officials decided to keep Ryan Labs as a passive bond manager to manage $50 million. Ryan Labs had been awarded on a temporary basis the entire $100 million bond portfolio, following the termination of an unnamed manager.
Worcester eyes bond issue
The Worcester (Mass.) City Council is expected to vote April 7 on issuing pension obligation bonds for the Worcester Retirement System. It could issue bonds of more than $200 million, almost doubling the system's assets, now at $280 million.
James A. DelSignore, city auditor and trustee, said, "We may be looking for new managers" to handle the new money, especially in real estate and venture capital, and for indexed equities. The council is expected to approve the bond issue. The proposal then has to pass the state Legislature.
Teachers fund adds Hughes
The $18 billion Teachers' Retirement System of Illinois hired Hughes Capital Management to run $50 million in a domestic bond portfolio.
Multicare hires for equities
Multicare Health System hired Boston Partners to manage $45 million in U.S. large-cap value equity for its $200 million operating fund. The firm replaces an unidentified, terminated manager. Arnerich, Massena & Stewart assisted.
Fund exec named
Joseph J. Troy has been named vice president-treasurer at Walter Industries. His responsibilities will include oversight of the retirement plans. The defined benefit plan has $246 million in assets and the profit sharing plan, $70 million, according to Money Market Directory.
Mr. Troy had been a senior vice president-corporate finance for the global finance division of NationsBank. He replaces Donald Kurucz, who died late last year.
Monmouth taps SEI
Monmouth University hired SEI Asset Management Group to outsource a global equity allocation for its $25 million endowment fund, a university spokeswoman said.
Warwick hires Rothschild
The City of Warwick (R.I.) Retirement System hired Rothschild as a core small-cap equity manager. The firm will manage $20 million, which will come from large-cap equity manager Loomis Sayles. Loomis will continue to manage $70 million of the $180 million pension fund. Watson Wyatt assisted.