State eyes stock hike
North Carolina's state Senate finance committee passed legislation that would let State Treasurer Richard H. Moore invest up to 65% of the book value of the $57 billion North Carolina Employees' Retirement System in stocks. The legislation, which was expected to go before the full Senate the week of Sept. 3, also would permit the treasurer to invest up to 5% of the pension fund's assets in hedge funds, venture capital and other alternative investments.
The pension fund has 55.58% of its assets in stocks, 42.39% in bonds, 1.85% in real estate and 0.18% in venture capital, said Katherine Kirkman, a spokeswoman for the treasurer. Under current law, the North Carolina pension fund can invest up to 50% of the book value of its assets in stocks, and up to $50 million in venture capital.
Exelon realigning plans
Exelon Corp. is restructuring the money manager lineup for its $3.8 billion Commonwealth Edison Co. pension plan and its $2.8 billion Peco Energy Co. pension plan, said Barry Mitchell, Exelon vice president and treasurer.
"We are evaluating the optimal manager mix, the number of managers and where it makes sense to coordinate them," he said. Exelon is considering combining the two plans, but Mr. Mitchell said either way, the company will coordinate the plans' investments.
"Whether we combine the plans will have no bearing on the investment management approach," he added. "Combination is really more of a human resources issues than a finance issue." Hewitt is assisting in the review, but he said, "Selection of managers is something we take care of ourselves."
Schwab cuts staff again
Charles Schwab will lay off between 1,600 and 1,900 full-time employees and 200 contractors by the end of October, and another 200 to 300 before the end of the year, Schwab officials said in a statement. The layoffs total 9% to 11% of Schwab's 22,300-member work force. Combined with layoffs earlier this year, Schwab's work force will be down 25% from the beginning of 2001.
Salisbury out at Schroders
David Salisbury resigned as CEO of Schroders PLC after results released for the first half of 2001 indicated the firm's institutional assets under management fell 19% to L100 billion ($144.9 billion), compared with the first six months of last year. Peter Sedgwick, Schroders chairman, was named acting CEO until a replacement is found, said Julian Samways, Schroders spokesman.
Schroders reported net outflows from institutional clients of L6.9 billion for the first six months of this year, vs. outflows of L2.7 billion for the same period in 2000.
Mr. Samways said the fall in institutional assets under management was partly because of a switch to specialist asset management by U.K. institutions, which are the firm's core client base. The losses also reflect the firm's patchy investment performance up until the end of 1999. Since then, however, performance has improved, with more than 66% of the firm's funds offering above-benchmark returns, he added.
AMG gets Friess stake
Affiliated Managers Group acquired a majority stake for $247 million in growth equity manager Friess Associates, which has $7.1 billion in asset under management. AMG purchased a 51% interest in Friess and will acquire an additional 19% in three years at a price based on the value of the business at that time. The remaining 30% will be owned by 11 Friess managing partners, including company founder Foster Friess and CIO Bill D'Alonzo.
Jean-Claude Scraire, chairman of the Caisse de Depot et Placement du Quebec, will relinquish his managerial duties as part of a top-level restructuring of the C$125 billion (US$80 billion) fund, said Lucie Freniere, spokeswoman. Michel Nadeau, deputy manager and second in command, will assume those duties.
The investment operations of the fund will be handled by subsidiary CDP Capital, of which Mr. Nadeau will be president and Mr. Scraire chairman.
Commenting on reports that the restructuring came about because of expected poor investment performance for 2001, Ms. Freniere said, "The markets are down. If we have poor results, everyone will. It's too early to talk about results yet."
Texas Teachers add post
Ronnie Jung was named deputy director of the $87.2 billion Texas Teacher Retirement System, a new position. Mr. Jung was CFO; he will be replaced by Tony C. Galaviz, controller.
ABP gets new chairman
Elco Brinkman has been appointed chairman of the e150 billion Stichting Pensioenfonds ABP. He replaces Bert De Vries who retired Sept. 1.
Mr. Brinkman, a former minister for Welfare, Health and Culture, most recently was chairman of the Dutch pensions supervisory board.
NYC seeks litigators
New York City Law Department is soliciting law firms qualified to do extensive private securities class-action litigation for the city's five pension funds, said Lorna Goodman, senior assistant corporation counsel. The goal is to create a pool of six or seven law firms, Ms. Goodman said. Phone (212) 788-0999 beginning Sept. 4 for details. Proposals are due Oct. 1.
Illinois trustee quitting
Glenn W. "Max" McGee, Illinois state superintendent of schools and chairman of the board of the $23 billion Illinois Teachers' Retirement System, will not seek a second three-year contract from the state board of education. Mr. McGee will remain in his position until Dec. 31. He was appointed in 1998.
Realty deals for CalPERS
CalPERS, through its first joint venture with Rodamco North America, will invest $222 million for a minority stake in three U.S. shopping malls owned by Rodamco, said Brad Pacheco, CalPERS spokesman. The $156 billion pension fund will hold a stake in Century City Shopping Center Marketplace, Los Angeles; Houston Galleria; and Oakbrook Center, Oak Brook, Ill.
Hospital taps Banc One
Elmhurst Memorial Health Care hired Banc One Investment Advisors to manage $50 million in active domestic fixed income for its $260 million Capital Reserve Fund, said John Katsianis, director of finance. Funding will come from reducing an active domestic fixed-income portfolio managed by Morgan Stanley, leaving it to run $50 million, he said.
Changes were made because the fund's size has increased, and Banc One's strategy complements that of Morgan Stanley, Mr. Katsianis said.