$2 billion pulled from Brinson
The California Public Employees' Retirement System has terminated $2 billion in accounts with Brinson Partners because of performance reasons.
At a March 15 closed door meeting, the $166 billion fund terminated Brinson as manager of a $1.1 billion U.S. equity portfolio and a $960 million global asset allocation mandate. Foreign assets are being transferred to the SSgA International Equity Index fund, while domestic assets are being shifted to internally managed completion and inflation-indexed bond funds.
Separately, the CalPERS staff has picked a shortlist of six managers to run one or more U.S. equity portfolios totaling $1.8 billion from contracts expiring or terminating with Brinson, ValueQuest and Valenzuela. The six managers are: Fidelity; J.P. Morgan; Osprey; Pacific Financial Research; Pzena; and Sanford C. Bernstein.
ISS backs IBM employees
Institutional Shareholder Services, a proxy voting advisory service for institutional investors, is backing a shareholder resolution at the IBM annual meeting April 25 that would restore pension and retirement medical coverage for workers whose benefits were slashed by IBM last year. Analysts say the ISS recommendation could affect as much as 30% of the voting stock.
BGI tops in Europe
Demand from European pension funds for specialist U.S. and European equity mandates soared during 1998 and 1999, according to William M. Mercer.
A survey of 185 money managers operating in Europe showed the number of specialist U.S. equity mandates won by them jump to 161 for the year through June 1999 compared with 81 the previous year. Specialist European equity mandates rose 57% in the same period. Meanwhile the number of domestic bond mandates fell 26%, to 506.
Of the managers surveyed, Barclays Global Investors was ranked first according to the size of its European pension assets, with $106.9 billion.
The use of index funds increased markedly in the United Kingdom to 25% of pension assets managed by the respondents. But index funds' penetration in continental Europe as a whole was much smaller -- between 2% and 4% of pension assets. The total pension fund market in Europe is estimated at $3.7 trillion.
FIAT hires 2 managers
FIAT Capi e Quadri hired Romagest, the asset management arm of Banca di Roma, and Morgan Stanley Dean Witter to manage its 45 billion lire ($22 million) pension fund, said Lorenzo Barolo, vice president. Each manager will run 50% of the total, and each portfolio will be split 30% short-term domestic and international bonds, and 70% in a global balanced strategy. A minimum 45% of the balanced portfolios will be in long-term bonds, with the remainder in equities.
"No tobacco" bond holdings
The $3 billion Contra Costa County Employees' Retirement Association adopted tobacco-free restrictions for a $400 million core domestic fixed-income portfolio managed by Scudder Kemper, said Patricia Wiegert, retirement administrator. The portfolio has no tobacco-related holdings, and Scudder Kemper said the policy would not change how the portfolio is managed or the fees charged, Ms. Wiegert said.
The board will ask Barclays Global Investors whether it's possible to run its $480 million in pooled indexed U.S. bonds, which track the Lehman Brothers Aggregate Bond index, on a tobacco-free basis.
Illinois Teachers taps 2
The $22 billion Teachers' Retirement System of the State of Illinois completed another phase its restructuring by hiring two large-cap value equity managers. Dodge & Cox and GE Investment Management each received mandates of 10% of U.S. equity assets, or about $700 million, said Keith Bozarth, executive director. Strategic Investment Solutions assisted.
Retirement plans to merge
Pending regulatory approval, New Century Energies will merge with Northern States Power and the companies' retirement plans will be combined. New Century's $1.3 billion master trust has a cash balance plan and two traditional defined benefit plans. Northern States has a $2.3 billion defined benefit plan.
Searching for 2 execs
The $4.6 billion Employees' Retirement System of Rhode Island appointed a five-member search committee to find replacements for Director Joann Flaminio and Assistant Director James Reilly; both will step down June 30. Ms. Flaminio resigned to pursue other endeavors; Mr. Reilly is retiring. The committee will draft RFPs at its April 19 meeting.
Distribution manager chosen
Memorial Sloan-Kettering Cancer Center, with $2 billion in assets, hired Warburg-Pincus as distribution manager, said CFO Michael Gutnick.
Warburg will determine the best time for selling the shares of stock that venture cap and private equity firms have been giving the endowment fund as distributions.
Memorial also committed $10 million to Thomas Lee Fund V. Funding will come from its $300 million private equity program.
Donovan quits CBOT posts
Thomas R. Donovan announced his resignation as president and CEO of the Chicago Board of Trade, positions he held since 1982. He will retain the title of president emeritus. No reason was given for his resignation and Katherine Spring, a spokeswoman for the exchange, said she could not comment.
