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 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.
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, he said. Northern also would consider mutual fund firms to build on its distribution capabilities. Any purchase would focus not on a particular size manager, but on a firm that fits into Northern's existing offerings, he said.
Robert A. DiMeo, managing director, DiMeo Schneider & Associates, said he and other principals at his firm are kicking around the idea of creating a type of United Asset Management for consultants.
Founders of many consulting firms ``are in their 50s. What are they ultimately going to do,'' Mr. Dimeo asked, to liquefy their investments in their firms? ``Do they sell to individuals working within the firm or do they sell to another entity? We have an idea of a UAM model for consultants.''
The idea, still in its infancy, could become part of the firm's long-range business plan.