RICHMOND, Va. -- The entire investment team of Sovran Capital Management resigned last month after negotiations to buy the firm from Bank of America broke down.
Eight employees, led by Sovran President Brad Coats, launched a new firm, Agincourt Capital Management.
"I don't think they thought we'd leave," said Patrick O'Hara, Agincourt managing director, formerly marketing director at Sovran. The professionals did not have employment contracts or non-compete agreements with BofA, he said.
Sovran manages $5 billion for pension funds and endowments.
"We have a number of highly qualified and experienced fixed-income and investment professionals servicing the accounts of Sovran Capital Management," Bank of America officials said in a statement.
Mr. Coats is president of the new firm. Portfolio managers are Duncan Buoyer, Pat Kelly, Bill Armes and Bill Putnam. Marketing analyst Laura Haynie and analyst Scott Marshall also belong to the new employee-owned firm.
"We've got several verbal commitments from clients and their response has been positive," Mr. O'Hara said.
University system terminates manager
CHAMPAIGN, Ill. -- The Illinois State Universities Retirement System terminated Global Asset Management because of poor performance, manager turnover and the firm's purchase by UBS, said James Hacking, executive director.
GAM managed $142 million for the $10 billion pension fund. The GAM assets will be placed in an EAFE index portfolio managed by Barclays Global Investors, which will total more than $1 billion.
If trustees decide to conduct a search, it probably will not happen until after the international equity portfolio has been reviewed, which traditionally happens in December, Mr. Hacking said.
John Griffith Jr., GAM managing director, declined to comment.
Knauf Fiber Glass to cut 6 bond portfolios
SHELBYVILLE, Ind. -- The Knauf Fiber Glass Co. will eliminate six domestic bond portfolios totaling $9 million when it merges its $9 million money purchase plan with its $11 million defined benefit plan early next year, said Warren Wise, corporate controller.
Knauf is planning to increase its equity allocation to 100% ,from 69%, said Mr. Wise.
The managers handling the domestic bonds are: Gradison-McDonald; Gratry & Co.; Heartland Advisors; Madison Investment Advisors; Manning & Napier Advisors; and Stein Roe & Farnham. Portfolio sizes and styles were not available.
Five of the six -- Madison Investment is the exception -- also manage stocks for the firm and will be retained for those portfolios.
Knauf also has a $49 million 401(k) plan.
Benefit Group is assisting.
Arvin Industries intends to review managers
COLUMBUS, Ind. -- Arvin Industries Inc. is expected to begin a manager review for its $300 million defined benefit plan by early next year, said Richard Smith, chief financial officer and vice president of finance.
Arvin has investments in domestic bonds and equities with six managers.
Hewitt will conduct the review, which is expected to be finished by February.
The company also has a $140 million 401(k) plan.
Settlement comes down the pipeline in Alaska lawsuit
ANCHORAGE, Ala. -- The Alaska Electrical Pension Fund, with $1 billion in assets, has settled a class-action lawsuit brought on behalf of current and former plan participants who worked on the Trans-Alaska Pipeline project.
Under the terms of the settlement, $18 million will be made available to the plaintiffs and their survivors, who number almost 3,600.
The suit sought to recover retirement benefits for workers with less than 10 years of service who were laid off and ceased to be plan participants. Most laid-off workers had not reached the 10-year vesting period, so benefits based on their employers' contributions were forfeited, unless workers returned to the plan or a reciprocal plan within the electrical industry within the next few years.
LACERA deems U.K. eligible for securities lending
LOS ANGELES -- The Los Angeles County Employees' Retirement Association board voted to include the United Kingdom as an eligible area for securities lending transactions.
The board of the $24.75 billion fund decided to put off for a future meeting the question of whether to delegate the authority to amend the list of eligible countries for securities lending transactions to the chief investment officer.
Schreiber Foods gains go-ahead for ESOP
GREEN BAY, Wis. -- Schreiber Foods Inc. has gained shareholder approval to create an ESOP, according to a company spokeswoman.
Officials intend to release more detailed information on the plan late this fall.
The privately held company will name an individual trustee to purchase and hold all outstanding shares that may be purchased by the company or the ESOP from current shareholders. The spokeswoman would not say how many shares are outstanding.
According to the Money Market Directory, the company has a $68 million savings plan, a $32 million profit-sharing plan and a $61 million defined benefit plan.
Louisiana School Employees sues Motorcar Parts
BATON ROUGE, La. -- The Louisiana School Employees' Retirement System has filed a class-action lawsuit against Motorcar Parts & Accessories Inc., Torrance, Calif., and certain officers and directors of the company.
The suit alleges Motorcar and some of its officers and directors issued "materially false and misleading statements to the investing public" concerning the company's financial results, which inflated Motorcar's stock price, according to Bernstein Litowitz Berger & Grossman, counsel for the retirement system.
On Aug. 2, Motorcar said it would restate its previously reported financial results for the fiscal years ended March 31, 1997 and 1998, and for the nine-month period that ended Dec. 31 because of accounting irregularities pertaining to the timing of product returns. Following the announcement, trading of Motorcar shares was halted.
The executives named in the suit are: Mel Marks, chairman of the board and chief executive officer; Richard Marks, chief operating officer and member of the board; and Peter Bromberg, chief financial officer.
The $1.4 billion fund intends to file to become the lead plaintiff in the case. The suit is open to all who bought the stock between May 22, 1997, and July 30, 1999.
New York City searches for a better response
NEW YORK -- The New York City Retirement Systems will issue a new RFP for a domestic equity index manager to run $40 billion because the system received only a few responses -- between five and 10 -- to the RFP issued in the spring, said Jane Levine, deputy comptroller for the $90 billion system.
The system wants to broaden the pool of applicants, she said.
The city expects to make a decision in the fourth quarter.
Alan Hevesi, New York City comptroller, said the system was prompted to put out a new proposal because several key staffers left the city's current index manager, Bankers Trust, to join Merrill Lynch. The city is not re-issuing RFPs for an enhanced index manager and a value manager, which went out at the same time.
School employees approve a new target
COLUMBUS, Ohio -- The School Employees' Retirement System of Ohio approved a new target asset allocation of 48% domestic equities, 16% international equities, 1% venture capital, 23% U.S. fixed income, 10% real estate and 2% cash.
Previously, the $8.1 billion fund targeted 45% in domestic equities, 15% international stocks, 1% venture capital, 28% domestic fixed income, 10% real estate and 1% cash. Doug Sisson, director-investments, said no manager changes were expected because of the allocation change.
Chicago Teachers name five finalists for consultant
CHICAGO -- The Public School Teachers' Pension and Retirement Fund of Chicago named five finalists in its search for a consultant.
State of Connecticut endorses new asset mix
HARTFORD, Conn. -- The State of Connecticut Retirement & Trust Funds investment advisory council has endorsed a new asset allocation, said Bernard Kavaler, spokesman for the $20 billion system.
Consultant BARRA Rogers- Casey's recommended allocation is 54% equities, 29% fixed income, 11% private equity, 5% real estate and 1% cash. The previous allocation was 55% equities, 30% fixed income, 11% private equity and 4% real estate.
The study recommends diversifying the fixed-income allocation, which had been all invested in core U.S. instruments. Under the new allocation, the fixed-income split is: 20% of total assets are in domestic, 5% high-yield, 3% emerging market and 1% inflation-linked bonds. It also recommends changing the equity structure to 36% domestic, 15% international and 3% emerging market.
County employees to narrow midcap equity choices
MILWAUKEE -- The Employees' Retirement System of the County of Milwaukee plans at its Oct. 13 meeting to narrow a list of 15 recommended domestic midcap equity managers to a smaller number of firms to interview, said Jac Amerell, director of the $1.5 billion fund.
The search was launched after the fund reallocated between $40 million and $50 million to an indexed midcap portfolio managed by Mellon Capital from the midcap equity portfolio of Firstar, Mr. Amerell said. Firstar was left with about $42 million in hopes that the firm's performance will improve in the next year, said Mr. Amerell. Officials at Firstar were not available to comment.
University endowment contemplates shifting styles
INDIANAPOLIS -- Butler University is considering changing the styles of the $110 million endowment's large-cap to midcap U.S. equity portfolios as the result of an asset allocation study, said Bruce Arick, controller and treasurer.
Wilke/Thompson now runs a $20 million active large-cap to midcap growth U.S. equity portfolio and Oppenheimer Capital runs a $20 million passive large-cap to midcap value U.S. equity portfolio, he said. A decision is expected by October.
Fund Evaluation Group is assisting.
Cosmair conducts asset allocation study
CLARK, N.J. -- Cosmair Inc. is conducting an asset allocation study for its $200 million defined benefit plan, said Kenneth Fischer, assistant vice president and treasurer.
The current mix is 47% U.S. equities, 16% international equities, 10% emerging-market equities, 17% intermediate and high-yield bonds and 10% real estate. BARRA RogersCasey is conducting the study, which is expected to be completed by December.
State system considers upping real estate allocation
NASHVILLE, Tenn. -- The Tennessee Consolidated Retirement System will begin an asset allocation study by January and expects to increase the $23 billion defined benefit plan's real estate allocation to 4% from 1% said Thomas Milne, chief investment officer.
The current mix is 33% domestic equities, 7% international equities, 52% domestic fixed income, 4% international fixed income, 1% real estate and 3% cash.
No timetable was set for completion.
Callan Associates will conduct the study.
Web site offers implied default rates
NEW YORK -- Savvysoft has launched a new Web site providing the market's implied default rates for credit derivatives. Its address is freecreditderivatives.com.
The site will cover credit derivatives in several industries, including financial and industrial companies, banks and utilities, and credit qualities from AAA to BAA3.
The site is updated daily using Savvysoft's TOPS 2000 Credit, a credit derivatives valuation product. Data for the site is based on live broker quotes for more than 2,500 corporate bonds.
Rich Tannenbaum, founder of Savvysoft and the former head of derivatives research at Bankers Trust, said the free Web site is "the first part of Savvysoft's overall Internet strategy. Over the next few months, we will be rolling out a series of products and services that will position Savvysoft as an e-commerce leader in the derivatives industry."
Ex-chief investment officer disciplined by SEC
NEW YORK -- Ellen Griggs, former chief investment officer of Mitchell Hutchins Asset Management, has agreed to a one-month suspension from associating with an investment adviser and has agreed to pay a $10,000 fine to settle an administrative proceeding brought against her by the SEC.
Ms. Griggs also agreed to be suspended from acting as a supervisor with any investment adviser for four months. As part of the agreement, Ms. Griggs did not have to admit to the commission's findings.
The SEC, in September 1998, alleged Ms. Griggs failed to adequately supervise Stephen Brown, a fund manager under her supervision. The SEC alleged that between September 1993 through February 1994, Mr. Brown purchased mortgage-backed securities in contravention of the fund's disclosed investment policies. Mr. Brown allegedly falsified the valuation of those securities, and when interest rates increased in February 1994, the fund incurred significant losses.
David Smith, Ms. Griggs' attorney, declined to discuss her current activities.
A Mitchell Hutchins spokeswoman said Mr. Brown was no longer with the firm. Mr. Brown settled his case with the SEC last September, said an SEC official.
LaFarge Corp. narrows search
RESTON, Va. -- The LaFarge Corp. narrowed to three finalists a search for an active domestic fixed-income manager for its $400 million defined benefit plan, said Kevin Grant, treasurer.
Finalists are Reams, Wellington and Met West.
Funding for the $25 million allocation will come from terminating a passive domestic fixed-income portfolio managed by Barclays Global Investors. The fund's consultant recommended moving all domestic fixed-income investments to active management, Mr. Grant said.
PIMCO is the plan's current active domestic fixed-income manager. A decision is expected this month.
Corporate governance meets social screening
NEW YORK -- Institutional Shareholder Services, a proxy voting and corporate governance advisory firm, has acquired Social Investment Research Service, which provides social issue portfolio screening services to investors. Terms of the deal were not disclosed. Suzanne Harvey, SIRS principal, was named managing director of the SIRS division and vice president of ISS. Separately, John McMahon was hired as institutional sales manager for ISS and sales manager for the SIRS division. He had been director of sales and marketing for the Investor Responsibility Research Center