CHARLESTON, W.Va. -- The West Virginia Investment Management Board will complete its move into equities in six months, said T.J. Carlson, chief investment officer for the $6.8 billion system.
Banned by state law from equity investments until a few years ago, the board now has 50% of its total assets in equities; its target is 60%.
Meanwhile, the state's plans to sell $4 billion in pension obligation bonds to retire the unfunded liability of the pension fund are on the back burner because of high interest rates, said H. Craig Slaughter, executive director.
"The administration is saying they are still committed to doing it when and if interest rates make sense," he said.
Miscalculation costs Ameritech $175 million in settlement
CHICAGO -- Ameritech Corp. was ordered to pay a total of $175.7 million to 17,000 retired workers as part of a federal court settlement because the company miscalculated pension benefits.
U.S. District Court in Belleville, Ill., ordered Ameritech, a unit of SBC Communications Inc., San Antonio, to recalculate its workers' benefits and compensate them accordingly. Starting this fall, workers who retired since 1994 will get payments that could reach up to $30,000 each. The payments include interest earned at 5% Funding will come from Ameritech's $15.2 billion pension trust.
CalPERS OKs $100 million increase in CUIP venture
SACRAMENTO, Calif. -- The $172 billion California Public Employees' Retirement System board approved a $100 million increase to its California Urban Investment Partnership -- a joint venture between Johnson/MacFarlane Partners and the Sacramento-based fund -- following a contentious debate last month. CalPERS doubled the staff recommendation, while turning down a staff-recommended $50 million additional allocation to RREEF.
The board also voted down a proposal by State Controller Kathleen Connell to allocate an additional $100 million to its Southern California urban infill allocation, doubling its size to make it equal with the $200 million Northern California program. The CalPERS board and staff are considering converting the two regional programs into one statewide program.
The staff is to return to the board in October with a proposed process for allocating additional assets in the statewide urban area.
Orange Co. search by invitation only
SANTA ANA, Calif. -- The $4.9 billion Orange County Employees Retirement System, Santa Ana, Calif., is conducting an invitation-only search for a manager to run a $100 million active large-cap growth equity portfolio benchmarked to the Russell 1000 growth index.
Callan Associates will conduct the search, said Farouki Majeed, chief investment officer.
Funding will come from terminated manager STI Capital Management, which ran $260 million in large-cap growth equities. Finalists are expected to be presented to the board in two or three months, Mr. Majeed said.
The system also increased its passive domestic fixed-income allocation to 20%from 10%of its $1.6 billion in domestic fixed-income assets, putting the money into an existing Lehman Aggregate bond index portfolio managed by Barclays Global Investors.
"We think that getting your core exposure through an index fund is a cost-effective way of doing it," said Mr. Majeed.
Chicago Laborers' conducts asset allocation/liability study
CHICAGO -- The $1.7 billion Laborers' Annuity & Benefit Fund of Chicago plans to complete an asset allocation/asset-liability study by November that will include liability information provided by actuary Watson Wyatt.
Consultant Becker Burke completed an asset allocation study two years ago, but couldn't include liability predictions because of an early retirement option under way at the time.
The fund has a funded ratio of 129% said James Capasso, executive director. The current asset mix is: 54.3%domestic equity; 35.6%fixed income; 3.6%international equity; 3.2%venture capital; 2.1%real estate; and 1.2%cash.
Consolidated Freightways drops REIT fund
VANCOUVER, Wash. -- Consolidated Freightways Corp. is terminating a $10 million REIT fund managed by RREEF; the $300 million plan is dropping the asset class on the recommendation of an asset allocation study, said James Epperson, cash manager.
The plan also has $4 million to $5 million collectively in RREEF's Mid-America III and apartment funds, closed -end funds that will reach maturity next year. Mr. Epperson said the REIT fund's performance was not a factor in the termination. The plan is still deciding where to place the assets.
Rhode Island Employees' searching for new director
PROVIDENCE, R.I. -- The $6.4 billion Employees' Retirement System of Rhode Island hired Management Search to search for a replacement for Joann Flaminio, who resigned June 30 after seven years as director.
Virginia system returns 15% for year ended June 30
RICHMOND, Va. -- The Virginia Retirement System earned a hefty $5.2 billion, a return of 15% for the year ended June 30, taking its assets to $40.6 billion. The system earned 15.2%for the three years and 17.1%for the five years ended June 30.
"We have been fortunate to have had most of our equity exposed to the domestic market over the past five years," said Nancy C. Everett, chief investment officer.
As of June 30, the system had $18.7 billion in domestic equities, $9.8 billion in fixed income, $6 billion in international stocks, $3.9 billion in private equities, $1.5 billion in real estate and $26 million in Treasury inflation protection securities.
Chicago Muni to include liability info in study
CHICAGO -- The Municipal Employees' Annuity & Benefit Fund of Chicago plans to conclude an asset allocation/asset-liability study by November that will include liability information from actuary Watson Wyatt.
Consultant Becker Burke completed an asset allocation study for the $6.2 billion fund two years ago but did not include liability predictions because of an early retirement option under way at the time.
Currently, the fund has 31 managers and 43 separate investment portfolios. The asset mix is: 59%domestic equities; 27%fixed income; 3%international equity; 3%venture capital; 2%real estate; and 6%cash.
Separately, the fund plans to enter into a non-exclusionary retainer with two securities litigation firms, Bernstein Litowitz Berger & Grossmann and Barrack, Rodos & Bacine.
Brinson team forms private equity firm
NEW YORK -- Brinson Partners formed Adams Street Partners LLC, composed of Brinson's existing 50-person private equity investment team led by T. Bondurant French, current head of Brinson's private equity group; he will retain that post.
Adams Street was created to avoid regulatory requirements that govern banks, such as a prohibition against owning more than 24.9%of any non-banking company, said Greg T. Fedorinchik, a Brinson spokesman.
The new company, which will operate separately from Brinson, will begin operations Jan. 1 and will not affect current private equity clients of Brinson or affiliated UBS Asset Management companies. Brinson Partners will hold a 24.9%stake in the new organization; the private equity team will own the rest.
Bank of New York broadens RiskMetrics relationship
NEW YORK -- Bank of New York expanded its relationship with RiskMetrics to provide the RiskManager value-at-risk application to BNY's global custody clients.
King Street Capital now goes by Tamro
ALEXANDRIA, Va. -- King Street Capital Partners changed its name to Tamro Capital Partners. The company was formed in June when Ronald A. Marsilia, Philip D. Tasho and Danna Maller Rocque left Riggs Investment Management to form King Street, a unit of Alleghany Asset Management. King Street was forced to change its name because another company already had claim to it, said Alleghany spokesman Michael VanDam.
BlackRock Solutions offers risk, investment analytics
NEW YORK -- BlackRock Inc. launched BlackRock Solutions, New York, to provide risk management and investment analytics to institutional investors.
The new business service's enterprise investment system integrates risk analytics with its trade processing system to deliver straight-through electronic securities processing. In addition, the firm will offer risk management services allowing clients to capture data on assets and liabilities and to generate risk management information at the security, portfolio and the larger enterprise level.
Northwestern Mutual to form trust company
MILWAUKEE -- Northwestern Mutual will form a trust company in January that will rely on subsidiary Frank Russell to provide multimanager investment strategies. P. Edwin Glass Jr. will be president and CEO of Northwestern Mutual Trust; he joined the insurer from First Union National Bank in March.