The federal government soon will begin selling more than $3 billion in domestic and international stocks and bonds it took over from the District of Columbia Retirement Board April 30.
Bankers Trust was hired to oversee the liquidation.
DCRB has kept intact its entire $68.4 million real estate portfolio and its $89.5 million alternative investments portfolio.
FBI examines investments
The FBI is investigating the $852 million in alternative investments made in the fourth quarter by Paul J. Silvester, former Connecticut state treasurer, said a spokesman for Denise Lynn Nappier, Mr. Silvester's successor.
The $18.5 billion pension fund has $3.5 billion in unfunded private equity investments. Mr. Silvester said he has not yet been contacted by the FBI or any other agency. He believes any investigation is politically motivated.
Legislation introduced
Rep. Sam Gejdenson, D-Conn., introduced the Retirement Security Act of 1999, which includes several provisions that were part of President Clinton's budget proposal for fiscal 2000.
The legislation gives a tax credit of up to $1,000 per year for three years to small businesses to set up new pension plans. It allows participants in Section 457 deferred compensation plans to roll over savings into IRAs when they switch jobs, and speeds up vesting of employer contributions.
REIT strategy changed
The $36.5 billion Pennsylvania Public School Employees' Retirement System altered its REIT strategy by reducing its internally managed REIT portfolio to $275 million from $525 million, said CIO John Lane.
The board approved hiring Security Capital to manage the $250 million in a concentrated REIT portfolio with full discretion, Mr. Lane said.
"We believe going forward a concentrated portfolio will do well. The internally managed REIT portfolio has performed very well, but it's broad-based and may not be as effective," he said.
The system's $625 million commitment to REITs is unchanged. The remaining $100 million in the REIT portfolio will continue to be managed by Morgan Stanley, Mr. Lane said.
Endowment picks BT
The $400 million endowment of Rochester Institute of Technology hired Bankers Trust to run $40 million in active international equities, said Cynthia Podvin, endowment financial analyst.
Funding came from terminating three managers, which she declined to name. Newport Capital Advisers assisted.
NYSTRS taps consultants
The $80.9 billion New York State Teachers' Retirement System hired Evaluation Associates and Institutional Property Consultants, respectively, as general and real estate consultants, said Candice Ronesi, spokeswoman.
Evaluation Associates replaces Mercer. IPC was the incumbent and had rebid on the real estate consulting job.
The board also committed to two private equity partnerships, Apollo Real Estate Investment Fund IV and Compass Partners European Equity Fund. Each partnerships can receive up to $150 million. Funding will come from cash flow.
The board decided to renew its contract with domestic large-cap manager Ark Asset Management, which currently has $1.3 billion and remains on the fund's watch list.
Fund in REIT deal
The $100 billion New York State Common Retirement Fund and Kimco Realty have teamed up to launch the Kimco Income REIT, a $430 million publicly traded REIT that will acquire retail properties. The pension fund contributed $117 in cash to the venture while KIMCO contributed 19 properties with an aggregate value of $105 million plus an additional $12 million in cash.
Prime Capital sold
First Indiana Bank announced that FirstTrust Indiana, its investment advisory and trust division, has acquired Prime Capital Management, effective April 30. The terms were not disclosed.
Prime Capital's founder and president, Leland E. Tanner, will join FirstTrust as an executive vice president. Prime Capital has $550 million in assets.
FirstTrust Indiana began operations Nov. 12 and received trust powers Dec. 31. It has $900 million in assets under management.
Nomura as activist
Nomura Asset Management plans to exercise its voting rights at shareholder meetings, becoming the first Japanese investment management company to do so.
Under the new policy, Nomura plans to vote against companies or abstain in cases where firms have conducted illegal acts, posted huge losses or ignored the views of shareholders.
Nomura officials said they believe the firm can improve profits for clients by actively participating in corporate governance as an asset management trustee.
Fire fund rehires firm
The $6 billion New York City Fire Department rehired Evaluation Associates as its outside consultant for another three years, after going through an RFP process, said Jane Levine, deputy comptroller.
SIA pushes streamlining
The Securities Industry Association last week submitted a proposal to lawmakers on the Senate Banking Committee, asking them to streamline securities laws, eliminate duplication between federal and state laws and get rid of obsolete regulations.
The association's proposal recommends a "national license" that would let federally registered investment representatives register only in states where they have a place of business and create uniform state registration standards based on SEC requirements. The SIA proposal also would extend "national market" treatment to a broader range of securities, so only federal regulations would apply to them.
McKesson sued
The $200 million Office & Professional Employees International Union, Local 153, filed a class-action lawsuit against McKesson HBOC April 29, one day after the company's stock fell almost 50%following the disclosure it would restate its fiscal 1999 earnings.
The pension fund filed the suit in the U.S. District Court for the Northern District of California on behalf of those who bought McKesson common stock between July 28, 1998, and April 28, 1999.
New exec at Rexam
Ray Martin will become corporate compensation and benefits manager at Rexam, Tonbridge, England. The new position includes oversight of Rexam's L1 billion ($1.61 billion) in pension assets. His job as head of group retirement benefits at London-based AstraZeneca PLC, with L2.6 billion in pension assets, has not been filled.
Mr. Martin will retain his responsibilities as vice chairman of the European Federation for Retirement Provision and chairman of the U.K.'s National Association of Pension Funds.
Washington U promotion
Barbara Feiner was named vice chancellor of finance for Washington University, where she will be head administrator for a $3.5 billion endowment. She replaces Lee Weeks, who resigned to join Kennedy Capital Management.
Ms. Feiner previously was director of investments, and her position remains vacant.
1838 gets new client
The $25 million pension fund for the city of Newark, Del., hired 1838 Investment Advisors to replace Lazard Asset Management as a $1 million small-cap value U.S. equity manager for performance reasons, said Charles Zusag, finance director.
Tucker Hewes, spokesman for Lazard Asset, declined to comment on the matter. Smith Barney assisted.
