LEXINGTON, Mass. -- Raytheon Co.'s pension fund has been quietly adding to its stable of minority and women-owned money managers as a part of an ongoing involvement with Jesse Jackson's Wall Street Project.
"We simply made the case that we have a body of talented people," Mr. Jackson, who sat in on one of the meetings with Raytheon, said in an interview with Pensions & Investments. "It was a very good meeting."
Since beginning discussions with the Wall Street Project in late 1998, Raytheon added $368 million to its commitments to women- and minority-owned money managers, making new capital allocations to four firms: MDL Capital Management Inc., Pittsburgh; NCM Capital Management Group Inc., Durham, N.C.; Earnest Partners, Atlanta; and Zevenbergen Capital Inc., Seattle.
The move more than doubled the $14 billion defined benefit plan's commitments with such firms to $578 million, or about 4% of the assets.
The Wall Street Project owns stock in 250 companies, including Raytheon, Reverend Jackson said, and is working to promote "the greenlining of America," by encouraging these companies to make investments in U.S. companies and use U.S. service providers run by minorities and women, such as money management firms, for their pension funds.
"We simply are challenging these companies to use a broader base of money managers," he said.
More to come
An announcement of further hirings might come next month at a conference in New York sponsored by the Wall Street Project, an effort to promote minority employment and improve access to capital for minority-owned firms, said David Polk, spokesman for Lexington-based Raytheon.
Raytheon will be participating in the conference. which will have a workshop "dealing with major trustees, like pension funds," and discussing how to get more minority and women-owned firms to be used by these funds, according to the Reverend Jackson.
Since it started having meetings with the Wall Street Project, Mr. Polk said, "We've had an ongoing effort to increase diversity there (in the pension fund) and in our management ranks."
Raytheon's new chief executive officer, Daniel Burnham, took part in the discussions, Mr. Polk said.
Besides the aforementioned group, the minority- and women-owned money managers Raytheon is using are Ariel Capital Management Inc., Chicago, and Bradford & Marzec Inc., Los Angeles.
All six of the firms are investing in fixed income, large-cap growth equity and small-cap value equity.
Some of the firms were recommended to Raytheon by the Wall Street Project and some were found by the company, Mr. Polk said. "The track record of the firms and their (investment) performance were the most critical factors we looked at," he added.
He also pointed out that "the number of minority-owned firms isn't that great," and that finding the right firms with good performance was not easy.
Raytheon has not had any major discrimination complaints made against it, unlike Texaco Inc., which hired eight minority- and women-owned firms to manage money for its pension fund in one month in 1997, as part of a settlement of a racial discrimination suit.
(In October, a civil arbitrator ruled that a Raytheon unit in Virginia had discriminated against a group of women involved in work to dismantle old Soviet weapons -- a charge Raytheon denies.)