TROY, Mich. -- The Carpenters Pension Fund, Detroit & Vicinity, is among a group of four to eight pension funds negotiating to acquire partial interest in the new Greektown Casino, Detroit.
A spokesman for the $1.2 billion carpenters fund did not name the other pension funds negotiating with two Detroit families who are selling their 40% interest in the casino. The Sault Ste. Marie Tribe of the Chippewa Indians owns the remaining interest in the soon-to-be-completed casino.
The Michigan Gaming Control Board on May 17 delayed a vote on the sale until July 11. which will give the parties time to complete negotiations. Pending board approval, a licensing hearing would start July 18.
University of the South mulls placing hedge fund money
SEWANEE, Tenn. -- The University of the South is deciding where it will place $15 million it got back from the liquidation of the Tiger Jaguar global hedge fund.
The money likely will be reinvested in more than one hedge fund, said David Simpson, vice president of business and community relations. The $256 million endowment does not expect to make a decision before October.
In addition, the endowment will redistribute some assets to fixed income from equity to meet its target allocations; exact figures were not available at press time. Currently, the endowment's asset mix is 70% equity, 20% fixed income and 10% hedge funds.
LSU Agricultural, Mechanical College reviews asset classes
BATON ROUGE, La. -- Louisiana State University Agricultural & Mechanical College is reviewing convertible bond, hedge funds and other alternatives, real estate and high-yield asset classes as part of an asset allocation study for its general endowed fund.
The $103 million fund's current asset allocation is 66% equities and 34% fixed income, said Phil Griffith, investment manager for the fund. Recommendations will be given to trustees in August, he added. The study is being done internally using software from Zephyr Associates.
Separately, the fund boosted the equity limit in its investment policy to 70% from 66%. Mr. Griffith said he didn't expect any money manager searches to result from the policy change.
N.Y. State Common fund, Boston Properties in venture
ALBANY, N.Y. -- New York State Common Retirement Fund, Albany, entered into a joint venture with Boston Properties, a REIT specializing in office properties, committing $270 million and participating in Boston Properties' future acquisitions and development projects, according to H. Carl McCall, New York State comptroller and sole trustee of the fund, and Boston Properties officials.
The $127 billion fund initially acquired interests in two Boston Properties assets through the joint venture: a 49% interest in Metropolitan Square, an office building in Washington; and a 75% interest in 140 Kendrick St., Needham, Mass., an office building. Boston Properties received cash proceeds of about $47 million and the New York Common fund assumed about $126 million of debt. J.P. Morgan Investment Management Inc. advised the fund in connection with the agreement.
Also, Mr. McCall announced the fund had a return of 17.8% for the fiscal year ended March 31. The fund achieved an annualized three-year rate of return of 18.7% and five-year return of 17.7%. He proposed the enactment of a permanent cost-of-living adjustment for public employee retirees, and said the fund's strong results make if affordable now.
The fund's asset allocation consists of 50% domestic equities, 27% fixed income, 11% international equities, 5% private equity, 2% emerging market equities, 2% equity real estate, 1% global equities and 2% short-term investments.
AOL pays $3.5 million fine for violating securities law
DULLES, Va. -- America Online Inc. on May 15 agreed to pay $3.5 million in fines to the SEC for violating federal securities laws in connection with how it accounted for certain advertising costs in 1995 and 1996. It also agreed not to violate securities laws in future.
Instead of expensing its advertising costs each year as they occurred, AOL capitalized most of the costs of acquiring new subscribers, including the costs of sending computer disks to potential customers, and reported those costs as an asset on its balance sheet. The company reported profits for six of the eight quarters in those two years, instead of the losses it would have reported had it expensed the costs as they occurred. The costs reached $385 million by Sept. 30, 1996, when the company wrote them off in their entirety.
Bush personal account plan draws raves from Cato
WASHINGTON -- The Cato Institute, a Libertarian think tank, is applauding Texas Gov. George W. Bush's proposal to let individuals invest a portion of their Social Security taxes in individual accounts.
"Gov. Bush obviously reads the polls. They show strong support for personal accounts among all Americans, but particularly among minorities and the young," said Michael Tanner, director of Cato Institute's Project on Social Security Privatization. The Cato Institute is a big proponent of giving individuals control over their Social Security payroll taxes.
Mr. Bush did not specify how much of the payroll taxes he would like to see going into the individual accounts, but his plan is based on a proposal by economist Carolyn L. Weaver, a Bush campaign consultant who, as a member of the presidential Social Security advisory council, had earlier suggested two percentage points of the 12.4% payroll taxes be allowed to go into the new accounts. Mr. Bush also said he would not increase the payroll taxes to stabilize the Social Security system.
Virginia Retirement boosts investments with 3 firms
RICHMOND, Va. -- The Virginia Retirement System made three additional investments with existing managers, two in real estate and one in private equity.
The $38.9 billion fund invested $100 million in JER Partners Fund II, an opportunistic real estate venture; $150 million in CRA Real Estate Securities, a publicly traded REIT; and $30 million with TA Associates. Funding will come from cash.