Changes at Merrill
Merrill Lynch will revamp its asset management operations by creating a single business for the management of the $521 billion it holds for clients in three divisions in the group.
The restructuring will see Carol Galley and Stephen Zimmerman, co-heads of Merrill Lynch Mercury Asset Management in London, run the global business alongside Jeff Peek, now vice president of Merrill Lynch and head of the asset management group.
Merrill Lynch's asset management group comprises Merrill Lynch Asset Management, which focuses on the U.S. retail market; Merrill Lynch Mercury Asset Management, which handles institutional clients; and Hotchkis and Wiley, which handles mostly institutional business.
There will be no job losses, said a spokesman for the group.
SSgA wins and loses
State Street Global Advisors won a non-solicitation injunction against three former employees, but lost its claim the employees had violated non-compete and non-disclosure clauses in their contracts.
Dean Barr, Joshua Feuerman and Richard Goldman were ordered by Suffolk County Superior Court Justice Raymond Brassard not to try to solicit SSgA employees before February 2001. Mr. Goldman also was ordered not to solicit business from SSgA or any subsidiary until that time.
Judge Brassard wrote, "Because (Mr.) Goldman acknowledges that he had direct personal contact with State Street clients both immediately before and after his departure from State Street, and that he discussed with those clients his move to BT, State Street has a reasonable likelihood of success on its claim that (Mr.) Goldman violated his covenant not to solicit clients."
According to sworn statements from SSgA employees, Mr. Goldman, who had been head of corporate defined benefit sales for the northeast region, told fellow workers that a headhunter was sniffing out staff at SSgA on behalf of Deutsche. He also contacted the pension administration staff of Philip Morris, to tell them he had left SSgA, and reported his departure to James Rich, the senior investment strategist of the $58 billion IBM retirement fund, according to court papers.
SSgA didn't present evidence that Messrs. Barr and Feuerman had contacted clients.
IBMers file resolution
A group of IBM employees, and at least one ex-employee, all members of the IBM Employees Benefits Action Coalition, have submitted a shareholder resolution asking the company to restore retirement and health-care benefits offered before it switched to a cash balance pension plan in July. The resolution also calls on IBM to improve the benefits offered under the hybrid plan so employees receive the same monthly pensions (or one-time payments that are the actuarial equivalent) as they would have under the old pension plan.
Endowment eyes hedge funds
The $2 billion University of Chicago endowment will study hedge funds to determine how much to invest in them and which strategies would be appropriate, said Carla McGuire, assistant vice president for investments.
International changes coming
The $3.4 billion Sacramento (Calif.) County Employees' Retirement System will pick two or three active international equity managers this week to run $500 million, said Jeffrey States, chief investment officer. Finalists are: Templeton; Capital Guardian Trust; Delaware; and Bank of Ireland. Cap Guardian and Templeton also are up for an emerging markets mandate, as is City of London Investment.
The fund has boosted international stock exposure to 20% of assets from 15%, and has changed from a regional approach to EAFE and emerging markets or EAFE-plus mandates.
The county dropped Schroders and Morgan Grenfell as managers of respective Pacific Basin and European equity portfolios of $120 million each. Another $150 million will be taken from a passive European stock portfolio managed by Deutsche Asset Management, which continues to run 25% of the fund's international equity assets in an indexed EAFE portfolio.
The fund plans to select two managers to run EAFE portfolios. The question is whether the fund will hire a separate emerging-markets manager as well.
Mercer is advising.
Morningstar advice coming
Morningstar on Jan. 24 will unveil its Internet advice offering, which it will provide free of charge to all large 401(k) plans for the first year. Jim Wironen, Morningstar's senior vice president of institutional services, revealed details of the company's plans at P&I's defined contribution conference in San Francisco last week. After the first year, he said, Morningstar will charge less than $15 per person, but the exact arrangement will vary with each plan sponsor.
Missouri fund names CFO
Lori Woratzeck, business analyst for American Management Systems, will become CFO of the $21 billion Public School Retirement System of Missouri Nov. 15. She will replace Virginia Brizendine, who became CFO for the $8.1 billion School Employees Retirement System of Ohio.
Private equity funds picked
Trustees of the $25 billion Pennsylvania State Employees' Retirement System voted to place as much as $105 million in private equity: up to $35 million with Audax Private Equity Fund; up to $35 million with HealthCare Ventures VI; up to $20 million with Cross Atlantic Technology Fund; and up to $15 million with Advanced Technology Ventures VI. All allocations will be funded from cash as part of the fund's long-term investment plan and are subject to successful completion of contract negotiations.
Cambridge Associates assisted.
Colorado will offer match
The Colorado Public Employees' Retirement Association will begin offering 401(k) plan participants a matching contribution in January 2001, when officials anticipate the $25 billion defined benefit plan will be fully funded, said Carole Wright, a PERA trustee at P&I's defined contribution conference last week in San Francisco.
Teachers extends contracts
The $81.5 billion New York State Teachers' Retirement System renewed contracts for one year with managers: Sanford C. Bernstein, $1.26 billion in U.S. large-cap equity; Dresdner RCM Global Investors, $216 million, and Peregrine Capital, $347 million, both in U.S. small-cap equity; Bankers Trust, $1.2 billion, international indexed equities; and Fiduciary Trust, $607 million, Lombard Odier, $626 million, and Wellington Management, $772 million, all in global fixed income.
