Maxwell report finally issued
A report issued March 30 on the financial affairs of Robert Maxwell said U.K. pension trustees need better training to prevent another Maxwell-like raid on company pension funds.
Mr. Maxwell stole L450 million ($652 million) to finance his publishing empire before dying in a boating accident more than 10 years ago.
The report from the British Department of Trade and Industry, eight years in the making, said the Occupational Pensions Regulatory Authority needs to provide the training. It also blamed Coopers & Lybrand Deloitte, auditor to the pension funds, saying the firm knew about "the practices in the pension funds," including borrowing pension assets to support other businesses and as collateral for bank borrowings.
Roger White, director of corporate communications for PricewaterhouseCoopers, said the firm accepted the report.
Allianz, Dresdner deal soon
An announcement on merger talks between Allianz and Dresdner Bank is expected early this week, according to sources close to both organizations. Official statements from both banks last week confirmed talks were at "an advanced stage."
A combination of Allianz' and Dresdner's asset management operations would create a money manager with nearly $900 billion in assets under management. But the future of each organization's asset management businesses is unclear at this stage; spokesmen at both firms would not comment.
Amex combos eyed
None of the companies involved would comment on rumors that American Express is about to be acquired, but any of the suitors would make an interesting asset management partner. American Express had $273 billion under management as of Dec. 31.
If the groom is Citibank, whose assets under management at year end were $350 billion, combined assets under management would climb to $623 billion. Another rumor lists Morgan Stanley Dean Witter as a suitor. That combination would create a money manager with $765 billion under management.
Insurer American International Group would bring about $124 billion to the party.
Guessing about Bland
Will Gary Bland stay or go? As Boeing Co. prepares to move its headquarters from Seattle to Chicago, Dallas or Denver, members of the investment community wonder whether Mr. Bland, vice president, trust investments, will make the move. Mr. Bland, who turns 58 in June, oversees a staff of about five in the employee benefit investment group. A Boeing spokeswoman said the corporate finance group would make the move and that Mr. Bland is part of that group. Boeing has more than $65 billion in retirement assets.
But some sources say a trial balloon is being floated to keep the pension staff in Washington state. Mr. Bland wouldn't comment.
CalSTRS mulls interests
CalSTRS signaled its intention to boost its investments in secondary private-equity partnerships. "In the current environment, we expect opportunities to increase for these secondary interests," said Sherry Reser, spokeswoman for the $105 billion California State Teachers' Retirement System.
Other institutional investors may want to sell partnership interests to rebalance their private equity allocations, limited partners may want to free up capital, many financial institutions may want to scale back commitments to boost capital reserves, while others may require increased liquidity, a CalSTRS document said.
Proposed procedural changes, which will be considered at the April 4 investment committee meeting, would make it easier for staff to invest in secondary interests, which CalSTRS describes as less risky, and offer enhanced returns. The system has $250 million in secondaries.
Fresno moves into alternatives
The Fresno Retirement System will allocate 2% of its $1.7 billion in total assets to alternative investments, the system's first exposure to the asset class, said Stanley McDivitt, retirement administrator. Funding for the allocation will come from rebalancing, he said. The system expects to begin a manager search in six months.
N.Y. fund boosts 2 managers
The $120 billion New York State Common Retirement Fund moved $15 million each to existing active domestic midcap value equity manager Schneider Capital Management and style-neutral core manager Fan Asset Management, increasing these portfolios to $115 million and $62 million, respectively.
Funding came from reducing domestic midcap core equity allocations to portfolios run by New Amsterdam Partners and Fuller & Thaler Asset Management, leaving them with $162 million and $128 million, respectively. The move was part of a rebalancing between growth and value in the system's Progress Investment Management emerging manager program.
Private equity in Indiana bill
The Indiana state Senate is considering a bill that would create the Indiana Investment Co. and make it the sole gatekeeper for private equity investments for the $12 billion Indiana Public Employees' Retirement Fund and the $6 billion Indiana State Teachers' Retirement Fund. The bill would require the two pension funds to use this firm as their exclusive agent for the management and investment of all their assets allocated to private capital investments. Indiana Employees plans to search for its first private equity managers later this year.
Yoakum rejoins Missouri fund
M. Steve Yoakum is returning as executive director of the $22 billion Public School Retirement System of Missouri, effective June 1. Mr. Yoakum, managing partner of Rockwood Capital Advisors, was executive director from 1994 to '97. Mr. Yoakum replaces Joel Walters, who is retiring June 30. Mr. Yoakum will help in the search for his replacement at Rockwood.
Teacher fund invests in Apollo
The $24 billion Teachers' Retirement System of Illinois committed up to $150 million to the Apollo V buyout fund. Funding comes from cash. The pension fund is moving gradually toward allocating 7% of assets to private equity. Brad Morrow, deputy CIO, expects to reach the target in 2005.
Also, PCA and Townsend are finalists in the system's search for a consultant to review its $2.4 billion real estate portfolio. The system has 10% of assets invested in real estate; its target is 8%. Trustees might make a selection in late April or mid-May.
University commits $8 million
The University & Community College System of Nevada will commit $4 million each to Commonfund Capital Private Equity V and Commonfund Capital International Partners IV, said Ruby Sharman, senior investment accountant in the $243 million endowment's banking and investment department. Funding will come from cash.