MONTGOMERY, Ala. -- Community Newspaper Holdings, Birmingham, Ala., an employee-owned company financed by the $22 billion Retirement Systems of Alabama, Montgomery, is purchasing two newspaper groups using several loans from the retirement system.
Community News purchased five daily newspapers from Gannett Co. for $62 million and by Sept. 1 will complete a purchase of 28 newspapers from Donrey Media Group for $183 million.
The size of the loans to Community News was not disclosed.
David G. Bronner, chief executive officer of the state pension fund, said the loans are backed up with collateral and pay a higher interest rate than the fund could earn elsewhere.
The Montgomery-based retirement system's relationship with Community News dates back to 1987, when the fund made the company a loan to buy its first 14 newspapers, said Ralph Martin, chief executive officer of Community News.
Welch Foundation terminates fixed-income manager
HOUSTON -- The $640 million Robert A. Welch Foundation consolidated its bond portfolio with one manager, terminating Investment Advisors Inc. in the process.
IAI had managed $50 million for the $640 million foundation.
Norbert Dittrich, foundation president, said Nicholas-Applegate now will be the sole fixed-income manager, running 25% of assets in a laddered portfolio of U.S. Treasuries.
Actuarial Sciences staff buys firm from AT&T
BASKING RIDGE, N.J. -- AT&T Co., as expected, sold Actuarial Sciences Associates Inc., its wholly owned subsidiary, to management and employees for an undisclosed amount.
The firm, which provides actuarial and employee benefits consulting to 100 large clients -- including AT&T, Lucent Technologies, General Mills, W.R. Grace and Shell Oil -- posted 1997 revenues of $76 million, 65% above 1996 revenues.
An ASA news release said the firm signed a long-term contract to continue consulting for AT&T. It has recently advised AT&T on its new cash balance pension plan, an early retirement incentive program for management employees and the 1996 spinoffs of Lucent and NCR.
Indiana Police hires first external money managers
INDIANAPOLIS -- The $245 million Indiana State Police Pension Fund has hired its first six outside money managers, said David Wilson, portfolio manager.
The fund plans to make the names of the managers public in August when they begin managing the assets. Until now, the fund had been managed in-house using fixed-income securities.
A total of $70 million will be allocated to the indexed, international, small-cap value, small-cap growth and large-cap value equity portfolios. Oxford Financial Advisors assisted.
Transit fund moving assets to outside managers
SAN JOSE, Calif. -- The Santa Clara Valley Transportation Authority is narrowing a list of managers to manage SCVTA's $150 million in pension assets. The fund now is managed in-house.
Manny Bagnus, SCVTA's investment manager, said the fund's board will meet July 20 with consultant Mercer Investment to review a list of finalists.
The fund seeks to hire one manager each for fixed income, large-cap value, large-cap index and small-cap value, he said.
The asset mix will be 59% fixed income, 21% large-cap value, 10% small-cap value and 10% large-cap index.
A final decision is expected by September, at which time the SCVTA will decide whether to retain Mercer as its consultant.
Met Life buys stake in Santander Global
NEW YORK -- Metropolitan Life Insurance Co. will buy 25% of Santander Global Advisors, Boston, the asset management arm of Banco Santander, the Spanish bank, for undisclosed terms.
Met Life executives said the purchase will give Met Life better access to the overseas investment management industry.
State to pay CalPERS back interest
SACRAMENTO, Calif. -- California Gov. Pete Wilson signed a bill appropriating $332.8 million in court-ordered, back-interest payments to the $140 billion California Public Employees' Retirement System.
The appropriation resulted from $910 million in missed contribution payments by the state to CalPERS during 1992 and 1993 that were repaid by the state in 1997. Both payments followed a 1994 lawsuit filed by CalPERS against the state seeking repayment of missed contributions.
William Crist, CalPERS board president, said the payment shows that no employer can "shortchange" employees.
But Jake Petrosino, research director for the PERS Betterment Committee, a pension watchdog group, said the state paid only 8.75% compound annual interest on the missed payments, while the plan has been making a annualized return of about 19%. The interest differential means the plan "got screwed" by the state, Mr. Petrosino said.
New York Common, CIGNA originate mortgages
ALBANY, N.Y. -- The New York Common Retirement Fund and CIGNA, an insurance company, will originate commercial mortgages, said Comptroller H. Carl McCall, sole trustee of the $105 billion pension fund.
New York Common and CIGNA will lend between $25 million and $100 million per project, with each institution contributing 50%. The loans will come from cash.
KeyCorp. acquires investment banking, securities firm
CLEVELAND -- KeyCorp. has acquired McDonald & Co., an investment banking and securities brokerage firm. The stock transaction is valued at $653 million.
The combined operations will focus on providing investment banking, capital markets and asset management expertise to corporate and private clients.
A new entity will be created, Key Capital Partners, under which two units will operate. McDonald-Key Investments will offer retail and institutional brokerage, equity and fixed-income trading and underwriting, investment banking, capital markets and other services. The other business group, as yet unnamed, will handle asset management, mutual funds, institutional asset services, wealth management and insurance.
McDonald-Key Investments will have headquarters in McDonald's current Cleveland location.
KeyCorp. also has established a $68 million employee retention program for certain McDonald staff members to be paid in cash and options in the next three years.
KeyCorp., a financial services and bank holding company, has $64 billion in total assets under management worldwide, of which about $30 billion is U.S. institutional tax-exempt. McDonald has more than $5 billion in total assets under management.
County putting new employees into DC plan
SAGINAW, Mich. -- The County of Saginaw is moving to a defined contribution plan for all new employees and will offer its 600 current employees a chance to convert defined benefit plan account values to the new plan. Conversion will be staggered, beginning in October, said Cathy Snyder, administrative director. Because the county has not yet told all employees about the changes, Ms. Snyder declined to give more details about the existing DB or the new DC plan.
Educational Technologies was hired to provide education and assistance to county employees, she said.
Arkansas fund increases commitment to timber
LITTLE ROCK, Ark. -- Arkansas Public Employees Retirement System committed an additional $80 million to Prudential Timber Investments to invest in timber properties, said Gail Stone, associate director-investments.
The $3.5 billion pension fund committed $75 million last September, she said.
The new commitment will be funded with money from the system's equity money managers.
Mercer forms panel on global investing
NEW YORK -- William M. Mercer launched the William M. Mercer Global Investment Forum, designed to help plan sponsors and globally oriented investment managers develop and share investment research on complex global issues.
Mercer's pension fund clients will be automatic members of the forum, a subsidiary of Mercer Consulting Group. Among the money manager members are: Loomis, Sayles; Pacific Investment Management; John Hancock Funds; MFS Institutional Advisors; Nicholas-Applegate; and Neuberger & Berman.
Conferences have been scheduled on themes such as global investment strategies, efficient retirement plans and optimization of assets in the context of plan liabilities.