Deseret Mutual Benefit Administration, Salt Lake City, is studying whether it should enhance the investment choices for participants in its $800 million 401(k) plan, said Kent A. Misener, managing director-investments. It hopes to make a decision by the end of the year.
Mr. Misener said the plan now has five managers, offering money market, short-term corporate fixed income, bond index, S&P 500 index, value equity, growth equity and international equity funds. Howard Johnson is record keeper.
New capital committed to private equity partnerships is on track to produce another record year, according to Callan Associates. The amount raised in the first quarter of 1998 was more than double 1997's first quarter, $13.4 billion vs. $6.2 billion.
Venture capital made the greatest quarterly leap, increasing 90% to $3.2 billion from $1.7 billion a year ago.
Fund-of-funds products are growing by leaps and bounds, according to Callan's research. The firm estimates that $1.1 billion was raised in the first quarter. Seven fund-of-funds vehicles were launched in the first quarter, seeking a total of $5.6 billion, close to what was sought in all of 1997.
Financial Engines has acquired the client base of William F. Sharpe Associates, a consulting firm that provides defined benefit pension funds with investment services based on modern portfolio theory, said William F. Sharpe.
Financial Engines was formed earlier this year to offer advisory services to 401(k) participants via the Internet, incorporating the same approach to portfolio analysis used by defined benefit plan sponsors.
The WFSA clients will not use the defined contribution services of Financial Engines, said Mr. Sharpe, the recipient of the 1990 Nobel Prize in Economics. WFSA's defined benefit clients are CalPERS, AT&T, Hewlett-Packard and United Technologies.
California Public Employees' Retirement System, Sacramento, made $50 million commitments each to alternative investment funds TSG Capital Fund III and Alta Communications VII. The TSG partnership invests in middle-market companies, including those in ethnic markets. Alta invests in the communications industry.
The board also approved a $275 million investment in Relational Investors, a fund that uses corporate governance activism to turn around U.S. companies that underperform. The additional investment brings the $140 billion pension system's total investment in Relational to nearly $500 million.
Trustees also heard a strategy to de-emphasize domestic buyouts and financial engineering strategies as part of its new annual plan for alternative investments. The fund also will de-emphasize the highly competitive United Kingdom market. Instead, it will focus on Western and Eastern Europe; and more selectively target Latin America and Asia.
Pennsylvania Public School Employees' Retirement System committed $175 million to real estate and private equity partnerships, said John Lane, chief investment officer. The trustees of the $41 billion Harrisburg-based pension fund committed $25 million to Strategic Hotel Capital Inc., in a new hiring; and an additional $125 million to Security Capital Preferred Growth Inc., which already had been assigned $50 million. Both are real estate related funds.
The trustees also committed $25 million to BG Media Investors LP, a private equity fund.
