IBM, yielding to employee pressure over its move to a cash balance plan, is more than doubling the number of workers who may choose to stay in its traditional defined benefit plan.
In a Sept. 17 memo to workers, Tom Bouchard, senior vice president of IBM's human resources, conceded thousands of IBM employees had "expressed deep concerns" about possible losses of pension benefits as a result of the conversion to a cash balance plan. Consequently, the company is now allowing about 65,000 workers age 40 and older with 10 or more years of service to stay in the old plan.
"We feel it's a great victory and it shows the power of employees when they get together and organize," said a spokeswoman for the Pension Rights Center, which helped IBM participants push for the change.
UBS acquiring Global Asset
UBS AG agreed to acquire Global Asset Management for between $575 million and $675 million. The purchase price, which will be paid in a combination of cash and UBS treasury shares, will be determined by assets under management at closing, expected within a few months.
UBS is buying GAM because it wants to expand its private banking capabilities for high-net worth individuals, said Christoph Meier, a UBS spokesman. GAM manages about $13.9 billion in global international manager-of-managers strategies. About $2 billion was managed for U.S. tax-exempt institutional investors as of Dec. 31.
A source close to the deal said GAM's approximately $4 billion in worldwide institutional assets will continue to be marketed under the GAM brand name and not by UBS Brinson, the U.S. institutional investment management unit.
AEW lines up refinancing
AEW Capital Management arranged an $827.4 million refinancing for nine superregional shopping centers owned by the General Motors Pension Trust, confirmed Tom Dobrowski, manager of real estate for the $80 billion pension fund.
The proceeds were used to retire a one-year bridge loan from UBS, said Mr. Dobrowski.
An AEW spokeswoman said the refinancing was accomplished through five transactions: three long-term fixed-rate loans with MetLife; one 10-year loan with Northwestern Mutual Life; and a three-year floating-rate securitization pool cross-collateralized by five regional shopping centers.
CWS Pension Fund restructured its asset allocation and dropped Colonial First State Investments as one of its balanced managers, said Alan Murphy, head of pensions.
The board of the L1.7 billion ($2.7 billion) fund hired Lombard Odier to run a L100 million active U.K. equity mandate; Morgan Grenfell Asset Management, L100 million in specialist U.K. equities; Fidelity Investments, L100 million in active international equities; and Norwich Union Investment Management, L200 million in U.K. bonds.
The remainder of the fund will be split between Legal & General Investment Management, which will run a passive balanced portfolio, and Mercury Asset Management, active balanced.
S. Carolina hires near
The $19 billion South Carolina Retirement System will hire its first small-cap to midcap domestic equity managers, pending on-site visits of four firms recommended by consultant Mercer.
J.L. Kaplan Associates and Boston Co. Asset Management will run the value-oriented portfolio, and Suffolk Capital and MFS Institutional Advisors will run the growth portfolio. Each firm initially will manage $50 million.
Alameda sets review
The $3.4 billion Alameda County Employees' Retirement Association will meet next month with Global Asset Management, regarding personnel changes and poor performance, said Betty Tse, investment officer. Global Asset is an active EAFE manager that was placed on probation by the fund; last week, UBS agreed to acquire GAM. Brent Felsman, spokesman for Global Asset Management, did not return phone calls by press time.
CalPERS hires Campbell
Funding came from reducing the allocation to existing manager Hancock Timber Resource Group to $814 million.
The board also hired UBS Brinson to develop a strategic plan for future timber purchases internationally. CalPERS' policy allows for up to 10%of the $160 billion system's timber portfolio to be invested internationally.
L.A. County issues RFP
The $24.8 billion Los Angeles County Employees' Retirement Association will issue an RFP to Barclays Global Investors and State Street Global Advisors to run $8.2 billion in domestic and international passively managed equity portfolios.
In July, five individuals resigned from LACERA's current index fund manager Deutsche Bank, formerly Bankers Trust. Following a meeting with Deutsche, LACERA staff issued a memo expressing concern over seven more people leaving; the new head of passive investment management, Kathleen Condon, being close to retirement; and Deutsche's recruitment efforts being "focused on their active quantitative strategies, a higher fee business, rather than on replacing the departed passive managers."
A spokeswoman for Deutsche Bank refused to comment.
Oregon needs director
The $33 billion Oregon Public Employees Retirement Fund is searching for a new executive director to replace Fred McDonnal, who will retire in December. He had been executive director since 1993.
Haverhill hires 3
The $115 million Haverhill Retirement System picked Irish Life, MFS Institutional Advisers and INVESCO as international equities managers to run $5 million each, subject to approval from the system's lawyers.
Funding will come from terminated managers Bank of Ireland and Babson-Stewart Ivory International.
Stevens joins BGI
Paul Stevens joined Barclays Global Investors as head of global technology. He will oversee BGI's worldwide information technology activities. He had been head of systems at J.P. Morgan Asset Management Services.
Ex-CSAM staffers set up shop
William Sterling, Stephen Waite, Ian Borsook and C.I. Mutual Funds, a Canadian mutual fund firm, have opened Trilogy Advisors, a new asset management firm that will primarily run global and international equities. All three men were at Credit Suisse Asset Management until June.