W. Gordon Binns Jr., former CEO of General Motors Investment Management Corp., will help the U.S. Treasury Department take over the bulk of the District of Columbia Retirement Board's assets.
As the first of a series of consultants expected to be hired, Mr. Binns likely will help the Treasury develop a plan to split the DCRB's $5 billion in assets and manage the assets it takes over. He also is expected to help pick a trustee or trustees to oversee the assets Treasury will control and to develop administration and record-keeping procedures, a Treasury spokesman said.
The Treasury also has discussed the subject with other investment management experts, including Jack R. Myer, chief executive of Harvard Management Co. and John E. Hull, deputy comptroller of investments for the New York State Common Retirement Fund, the Treasury spokesman said.
The takeover was mandated by a law passed in August.
Chicago Transit Authority terminated three U.S. bond managers from its $1.9 billion pension fund. NCM Capital; Weiss, Peck and Greer; and Bear Stearns were dropped for performance reasons, a fund official said. Maceo Sloan of NCM Capital would not comment on the termination. The other two firms did not return phone calls by press time.
The $100 million that in total was managed by the firms was moved to existing managers AlmalgaTrust and Chicago Trust, which now manage the total $260 million in the U.S. fixed-income portfolio. Wellesley Group assisted.
The Labor Department's ERISA Advisory Council yesterday agreed to study ``leakage" from U.S. pension systems. Leakage includes cases in which participants borrow money from retirement plans and fail to repay it, or quit their jobs and fail to roll over their assets into a new employers' plan.
The new council also will study why small businesses are not adopting retirement plans.
Council members will hold hearings on both subjects and present their reports in November.
Northern Trust, Chicago, would consider buying a mutual fund manager or investment manager to fill gaps in its product offerings, said Stephen B. Timbers, president of Northern Trust Global Investments.
For example, Northern's active equity portfolio group uses a growth investment style, so the purchase of a value manager might make sense, Mr. Timbers said. Northern also would consider purchasing mutual fund firms to build on its distribution capabilities, he said. Any purchase would focus not on a particular size manager, but on a manager that fits well into Northern's existing offerings, he said.