BRISTOL, England -- Imperial Tobacco Pension Fund will replace its in-house team with external managers, following a review by William M. Mercer.
Up to six managers will be hired to manage 83% of the L2.3 billion ($3.76 billion) fund. Up to three will be picked for U.K. equity mandates, comprising 42% of assets; one or two for U.K. bonds, 24%; one for property, 10%; and one for cash, 7%. The fund's 17% allocation to overseas equities is managed by five external managers in regional and country mandates.
The trustee concluded that global markets have become increasingly specialized, and beyond the resources of the small in-house team.
The key issue, said Mike Huckman, chairman of Imperial Tobacco Pension Trustees, is "more than four-fifths of the assets being in the hands of one manager, which we view as unnecessarily concentrated."
Of Imperial Investments' five investment professionals, Joint Managing Director William Mather will be retained to oversee external managers. It likely will be hard to redeploy other portfolio managers within the company, including Peter Dunscombe, joint managing director, Mr. Huckman said.
Orbitex pooled fund tops the charts so far
LONDON -- Orbitex Investments Ltd.'s new pooled balanced fund for U.K. pension funds is top of the class. In the first two months of 1999, the fund returned 50.45%, topping S&P Micropal's balanced manager universe. Since its Dec. 11 launch, the fund is up 50.84%.
Fund officials use a concentrated portfolio of 30 to 50 stocks. Currently, the Orbitex Exempt Balanced Fund is weighted nearly 35% in U.K. stocks, below the industry average for pooled funds of 55%; and 50% in overseas equities, 2.5 times the industry average. The remainder is invested in bonds, cash and property.
Asset allocation is overseen by Chief Investment Officer Robin Geffen.
SSgA plans to form euro-denominated fund
NEW YORK -- State Street Global Advisors plans to launch SSgA International Liquidity Fund, a euro-denominated money market fund, targeting U.S. institutional investors that have euro-denominated investments and need a place to park cash on a temporary basis.
State Street already has started an offshore euro money market fund. The U.S. fund, now in registration, "is for customers who prefer to be in a U.S. mutual fund," said Gus Fish, a principal with State Street.
The firm's goal for the fund is to reach $1 billion in assets within a year, said Victor Thompson, head of global fixed income at State Street.
Monep plans 6 offerings based on STOXX indexes
PARIS -- Monep will launch six new futures and options products based on the Dow Jones STOXX pan-European sector indexes, helping money managers adapt to sector-based investing. The Paris-based derivatives market will base the contracts on benchmarks for three of Dow Jones' 19 sectors: banking, energy and telecommunications, which together account for more than 30% of the STOXX pan-European index. The contracts will launch March 22, and will complement existing contracts based on the Dow Jones STOXX 50 and Dow Jones Euro STOXX 50 contracts.