SACRAMENTO, Calif. -- The California Public Employees' Retirement System has adopted a more flexible process for hiring external money managers for public securities.
The new process will enable the $156 billion fund's investment committee to replace underperforming managers more quickly. It also will permit the fund to reach out to qualified managers that otherwise might not respond to an RFP.
Under the new process, CalPERS will use its consultant's database, supplemented by an internal database, to winnow a broad universe of managers to a "focus universe" of about 50 firms for each asset class.
A list of target firms, which will be submitted to the investment committee for approval, will be split between those receiving immediate funding, a reserve list and rejected firms. Contact with target firms will be maintained regularly. When CalPERS decides to change its external manager lineup, staff will begin a competitive negotiation process.
The initial focus will be on searches for active managers for domestic equity, international equity and international fixed income.
Managers wanting to participate in CalPERS' database can obtain the form from the fund's Web site, www.calpers.ca.gov/invest/rfp.
Separately, the retirement system announced it is investing $1.4 million in PropertyFirst.com, an online real estate listing service for commercial and consumer real estate. The pension fund will encourage leasing and sales agents to market its properties through the Internet-based service and will provide access to PropertyFirst.com for the fund's seven core real estate equity managers, which manage more than $5 billion in properties.
The system also endorsed an expansion of its specialized equity real estate portfolio, which could push another $1.8 billion over the next three years into the area, which had $2.1 billion as of March 31; proposals on specific programs such as senior housing, in-state urban investing, agricultural, international and opportunistic investments will be addressed over coming months.
And the investment committee revised the fund's global corporate principles to conform to new guidelines adopted by the International Corporate Governance Network, a global group that adopted standards in July.
Alabama fund adds euro-denominated bonds
MONTGOMERY, Ala. -- The $24 billion Retirement Systems of Alabama added euro-denominated corporate bonds to its portfolio, a first for the pension fund, said Allen Webb, fixed-income analyst. Earlier this month, the fund participated in a E150 million ($154.7 million) offering by Staples, E25 million of which was earmarked for U.S. investors because it complied with SEC regulations.
Mr. Webb declined to reveal how much of the deal the fund bought. The system's international bond portfolio is now close to $200 million.
Boehner gathering info on updating ERISA
WASHINGTON -- Rep. John Boehner, R-Ohio, chairman of the House Employer/Employee Relations Subcommittee, is collecting ideas from pension lobbyists in Washington on ERISA in advance of hearings he plans to hold on the federal pension law.
The hearings are meant to determine if it's necessary to update the 25-year-old law. ERISA's Title I is expected to come under scrutiny, in particular the rules governing prohibited transactions. The federal pension law's reporting and disclosure rules also may get an airing.
"We have an old statute and an investment environment where new products are being rolled out all the time, and it looks like the statute might be in need of an overhaul," said Steve Saxon, partner at Groom Law Group, which represents investment advisers and service providers to retirement plans.
Los Angeles Archdiocese nearing a decision on manager
LOS ANGELES -- The Archdiocese of Los Angeles is nearing completion of its search for a new minority-owned small-cap growth domestic equity manager to run $10 million.
Jose Debasa, chief financial officer, said the finalists are Cordillera Asset Management, Brown Investment Management and Valenzuela Capital Partners.
Earlier this year, the $600 million endowment terminated Fortaleza Capital Management.
Asset Strategy Consultants is assisting.
California Teachers seeking new real estate director
SACRAMENTO, Calif. -- The investment committee of the $99 billion California State Teachers' Retirement System will ask the board at its Jan. 5 meeting to hire an executive recruiter to help fill its director of real estate position, said Patrick Mitchell, chief investment officer. If the board does not approve the request, the system will advertise the position, which will pay between $90,000 and $120,000 a year.
Mitch Pleis, the previous director, resigned to join mortgage bankers Trowbridge and Kieselhort.
Mr. Mitchell will handle Mr. Pleis' duties until a replacement is found.
GE invests $5 million in ScreamingMedia
STAMFORD, Conn. -- The $45 billion General Electric Pension Trust invested $5 million of a $30 million private equity financing by ScreamingMedia, a provider of information to Web sites and portals, said a spokesman for the pension fund. The fund was the lead investor in the deal, which included Van Wagoner Capital Management, J.&W. Seligman and Essex Investment Management, said a spokeswoman from ScreamingMedia.
IRS says `limit up' for retirees next year
WASHINGTON -- Pension plan participants will be able to collect $135,000 in annual retirement benefits next year, up from $130,000 this year, the IRS announced.
And thanks to the inflation adjustments, retirement plan participants will be able to stash another $500 in their 401(k) plans, for a total of $10,500 next year.
The salary limit for determining highly paid employees will rise to $85,000 next year from $80,000, and the amount of salary on which employers will be able to base pensions will bump up to $170,000 next year from $160,000 in 1999.
Duluth Teachers terminates Oppenheimer for equities
DULUTH, Minn. -- The $250 million Duluth Teachers' Retirement Fund terminated Oppenheimer Capital as its active large-cap value manager. The $42 million portfolio managed by Oppenheimer is now part of a $92 million enhanced S&P 500 account managed by Metropolitan West Asset Management. Jay Stoffel, executive secretary, said the termination was part of a moveaway from active management.
Instinet acquiring Lynch Jones & Ryan
NEW YORK -- Instinet Corp., the electronic trading subsidiary of Reuters Holdings PLC, will acquire Lynch Jones & Ryan, a leading provider of commission recapture programs for pension plan sponsors, executives for the companies announced.
They said they hope the union will create a powerful force in the pension fund sponsor community in the United States as well as in Europe and Asia for trading and commission recapture and soft-dollar programs.
The deal, pending regulatory approval, is expected to close by year's end. Terms weren't disclosed.
LJR is owned by 45 shareholders, including its four senior executives, who own 80%of the company.
N.Y. Common Fund reports 8.8% growth
ALBANY, N.Y. -- The $115 billion New York State Common Retirement Fund grew 8.8%for the year ended March 31 and had an average return of 16.3%for the three years ended March 31, according to the fund's annual report.
SEC eyes rule clarifying manager, broker differences
WASHINGTON -- The Securities and Exchange Commission is proposing a rule that would clarify the difference between money managers and securities brokers that charge asset-based fees.
brokers charging fees based on assets would not be regulated as money managers so long as they do not have discretionary authority to trade securities in the account. If the broker does have discretionary authority and charges an asset-based fee, the account would remain subject to regulation under the Investment Advisers Act of 1940.
PBGC announces maximum payout for 2000
WASHINGTON -- The Pension Benefit Guaranty Corp. this month announced it will pay up to $3,221.59 a month or $38,659.08 next year to each participant in underfunded pension plans it takes over. That's up from the current $3,051.14 a month or $36,613.68 per year.
Illinois Teachers reviews 3 consultant finalists
SPRINGFIELD, Ill. -- The Teachers' Retirement System of the State of Illinois is reviewing proposals from three real estate consultants: Pension Consulting Alliance, Courtland Partners and the Townsend Group, said Mark Caplinger, chief investment officer for the $22 billion fund.
The staff is interviewing candidates now and expects to make a recommendation to the board at its December meeting.
Chapman units to merge into eChapman.com
BALTIMORE -- eChapman.com is planning an initial public offering of 3.3 million shares of common stock, representing a 20%interest in the company. In conjunction with the offering, Chapman Holdings Inc., Chapman Capital Management Holdings Inc. and Chapman Insurance Holdings Inc. have agreed to merge with eChapman.com.
The Chapman Co. will manage the offering and then become a wholly owned subsidiary of eChapman.com, an online financial services company.
eChapman.com is developing an online financial services site, combining the products of the aforementioned companies, which will be coupled with an online portal targeted at female, African-American, Hispanic-American and Asian-American investors, groups it refers to as domestic emerging markets.
The Chapman Co. is the first, and currently the only, African-American controlled, publicly traded investment bank.
BISYS, RS Group set administration agreement
COLUMBUS, Ohio -- BISYS Fund Services reached an agreement with Retirement System Group to provide financial administration and fund accounting services for the RSI Retirement Trust.
RS Group is a full-service retirement benefits consulting firm for both qualified and non-qualified plans. The RSI Retirement Trust is a group of seven mutual funds with approximately $670 million in assets.