Long Island Lighting Co., Hicksville, N.Y., and Brooklyn Union Gas Co., New York, which are completing their merger, could wind up consolidating their 401(k) plans while keeping their defined benefit plans separate. Decisions may not come before the end of the year, said Michael Senicola, capital markets supervisor, LILCO. However, he said, there is a good chance the LILCO $316 million 401(k) and the BUGC $184 million 401(k) will consolidate. ``But no decision has been made on whose managers the plan will use: theirs or ours or a combination of both or neither,'' he said. ``One question we need to ask is whether we will do a search for a record keeper and managers.'' None of the plans share any managers in common. The LILCO 401(k) now uses three funds from MassMutual and two from American Express; Administrative Management Group does record keeping. BUGC uses nine Vanguard funds plus company stock; Coopers & Lybrand handles the record keeping. GenCorp Inc., Fairlawn, Ohio, is considering adding self-directed brokerage to its $500 million 401(k) plan, said Dave McNiff, director-investment management. This could allow participants to buy individual stocks and bonds, as well as an array of mutual funds other than those in the plan. There is no immediate timeframe for a decision. Asset Alliance Corp. acquired a 50% equity ownership interest in JMG Capital Management and its affiliate, Pacific Assets Management. It also will buy a 50% stake in Metropolitan Capital Managers LLC and its affiliate, Metropolitan Capital Advisors. Terms of the deals were not disclosed. JMG specializes in market neutral arbitrage strategies and has $300 million under management. Metropolitan Capital, which also manages about $300 million, focuses on event-driven investment strategies. The acquisition of JMG is completed; the purchase of Metropolitan is expected to close after Asset Alliance completes its initial public offering, which is in registration with the SEC. The S&P 500 stock index with, a 13.9% return, beat all median managed equity accounts in the PIPER universe in the first quarter. The closest contender was the median large-cap growth account, which also led for the year ended March 31. That account returned 13.8% for the quarter and 49.6% for the year. The index returned 48% for the year. The median midcap value equity account in the PIPER managed accounts universe had the lowest return for the quarter with 10.8%. The median large-cap value equity account returned 41.3%, the bottom one-year return for median equity accounts. For PIPER managed bond accounts the median long-duration bond account topped other median accounts and the index for both the quarter and the year with 1.7% and 18.8%, respectively. The Salomon Broad Bond index returned 1.6% and 12% for the two periods respectively. The median limited-duration bond account turned in the worst performance for the two periods with 1.5% and 7.6% for the quarter and the year respectively.
The MSCI World index in April advanced 0.9% in dollar terms, while MSCI's EAFE index inched up 0.7%. During the same period, the MSCI Emerging Market Free index fell 1.3%. The best developed market performer was Finland, up 18%. The Malaysia Free index - the group's worst performer - declined 15.8%. Among emerging markets, Greece led the pack, with a gain of 26.2%; Venezuela trailed with a -22.1% showing.Knoxville (Tenn.) Employees Pension Plan will select managers for three new asset classes - domestic large-cap value equities, publicly traded REITs and convertible securities - at board meetings June 1 and 2, said Mike Cherry, executive director. The system already has selected finalists, but Mr. Cherry declined to name them. The fund plans to give $100 million to the equities manager, and $35 million apiece to the REIT and convertibles managers. Funding will come from paring allocations to existing U.S. equity managers as well as $90 million parked in an index fund with Barclays Global after the termination of Chancellor LGT. Mercer is assisting. Visa International, Foster City, Calif., hired Hewitt Associates to assist it in assessing whether it needs to change or add more options to its 401(k) plan, said Lisa Ma, pension administrator. The $300 million plan, which did not use a consultant before, offers its 3,500 participants six investment choices. Cambridge (Mass.) Retirement System, with about $350 million in assets, picked McKay-Shields as its first high-yield bond manager to run a $13 million portfolio, said Larry Marino, the Segal Advisors consultant who assisted in the search. Funding will come from cash. Daniel R. Patterson joined Provident Investment Counsel as vice president and fixed-income portfolio manager, a new position. Mr. Patterson was most recently an institutional salesman at PaineWebber
