Minnesota keeps Lincoln as domestic equity manager
ST. PAUL, Minn. - The Minnesota State Board of Investments retained Lincoln Capital Management, which runs $633 million in active domestic equities for the system; the manager had been reviewed because of poor performance. Staff and investment committee members for the $38 billion fund said they were satisfied with changes Lincoln Capital made to portfolio management strategy and personnel. Lincoln also manages $1.7 billion in active domestic fixed income for the system.
The board also moved New Amsterdam Partners, which ran $166 million in active domestic equities for the system as an emerging manager, to its regular roster of equity managers. The change is status is because the firm's assets under management grew to $1.2 billion from $28 million when the board first hired it in 1994.
3 fixed-income finalists to vie for Sacramento County mandate
SACRAMENTO, Calif. - The $3.5 billion Sacramento County Employees' Retirement System selected Metropolitan West, PIMCO and Western Asset Management as finalists in its search for a core-plus fixed-income manager to run $200 million, said Jeff States, chief investment officer. Partial funding will come from reducing a Lincoln Capital Lehman Aggregate Bond index fund by $150 million, leaving it with $330 million; the rest will come from cash, he said.
The portfolio is being added to complement a $300 million active domestic fixed-income portfolio managed by Bradford & Marzec, said Mr. States.
Mercer Investment is assisting.
Northwestern Steel plans to be overseen by PBGC
WASHINGTON - The PBGC is taking over the underfunded pension plans of Northwestern Steel and Wire Co., Sterling, Ill., which went bankrupt last December. The plans, which had $311 million in assets and $470 million in liabilities, were shut down effective Aug. 28.
"PBGC is acting because these plans are underfunded by about $160 million and face abandonment as the company liquidates," said John Steal, acting executive director of the Pension Benefit Guaranty Corp.
Boston Partners settles suit over non-compete clause
BOSTON - Boston Partners settled its lawsuit with founding partner Wayne Archambo, who will join BlackRock Jan. 1 as a managing director. The settlement was reached Friday. The case had been set for trial today, said Mr. Archambo's attorney, Jeffrey Upton of Hanify & King.
Boston Partners sued Mr. Archambo in July to enforce a non-compete clause in Mr. Archambo's contract after he resigned from Boston Partners and joined BlackRock. While Mr. Archambo will be able to join BlackRock in January 2002, other terms of his employee contract are in effect until Aug. 25, 2002, according to a statement issued by Boston Partners and Mr. Archambo. Further terms were not disclosed.
Mr. Archambo will head BlackRock's small-cap and midcap value team, said Robert Connolly, general counsel and managing director at BlackRock.
Detroit adds $5 million to Mount Lucas allocation
DETROIT - The $2.9 billion Detroit General Retirement System increased its allocation to Mount Lucas Management's MLM Index fund by $5 million, to $20 million, said Timothy J. Rudderow, Mount Lucas president and co-founder. The entire index fund has about $750 million in unleveraged assets from institutional and high-net-worth investors.
The pension fund made the move because the MLM index has generated strong returns through "rapidly changing investment environments," David Clark, system chairman, said in a release.
Evanston Police & Fire to review plan allocations
EVANSTON, Ill. - Evanston Police & Firefighters Retirement System this fall will begin an asset allocation review of its $40 million police plan and its $30 million firefighters' plan, said William Stafford, spokesman. The current allocation for each plan is 45% equities and 55% fixed income, he said. There are no plans for manager changes, said Mr. Stafford.
David Wall & Associates will assist the police plan with its review; Consulting Group, a division of Salomon Smith Barney, will assist the firefighters' plan.
Mercer agrees to acquire SCA Consulting
CHICAGO - William M. Mercer agreed in principle to acquire SCA Consulting, said Ann Egan, Mercer spokeswoman. Terms were not disclosed.
SCA specializes in value management, performance measurement and compensation consulting services. The acquisition will add about 100 people to Mercer's offices in Los Angeles, Chicago, Dallas, London and New York.
Allied Products may pull plug on five retirement plans
CHICAGO - Allied Products Corp. might terminate its four defined benefit plans and its 401(k) plan because the firm is operating under Chapter 11 bankruptcy, said Jennifer Smith, assistant to Mark Sanderford, senior vice president. The plans have $104.8 million in total assets, according to the Money Market Directory.
Allied may purchase annuities for participants or turn the plans over to the PBGC, Mr. Sanderford said. The liabilities of all Allied's plans may exceed their assets, he said.
Spare co-founder opens value-oriented firm
SAN MATEO, Calif. - Anthony E. Spare, co-founder of Spare, Kaplan, Bischel & Associates, has set up a money management firm, Spare Value First, which aims to identify undervalued stocks for institutional investors and private clients. Mr. Spare will continue to use the value equity strategy he developed in the late 1960s that focused on relative dividend yield for institutional and high-net-worth investors. "Value investing has stood the test of time as the most logical, sensible and reliable way to invest and accumulate wealth," he said.
Mr. Spare retired as chairman and chief investment officer of Spare, Kaplan last October.
MFS launches new institutional portfolio
BOSTON - MFS Investment Management introduced the MFS Structured Equity-U.S. Core Portfolio for institutional investors. The strategy combines active equity research, quantitative valuation modeling and risk controls with a goal of outperforming the S&P 500 index by between 100 and 200 basis points per year within a three percentage points tracking error. It is actively managed by MFS' quantitative group, led by Deborah Miller and Matt Krummell. The portfolio mirrors the basic construction of the S&P 500 and maintains a neutral position on sector weightings and other metrics.
The strategy is being reviewed by a number of large public plans, said Joseph Trainor, president of MFS Institutional Advisors, but he declined to identify them.
The firm soon will introduce a version of the strategy that focuses on outperforming the U.S. FTSE 350.
CalSTRS hires search firm to find new CEO for system
SACRAMENTO, Calif. - The $105 billion California State Teachers' Retirement System, Sacramento, hired EFL Associates to find a new CEO to replace James D. Mosman, who is leaving at year-end to become executive director of the National Council on Teacher Retirement. System officials plan to interview finalists at CalSTRS' December board meeting.
Chicago Teachers puts Zurich Scudder on watch
CHICAGO - Chicago Public School Teachers' Pension & Retirement Fund put Zurich Scudder on watch due to continuous poor performance, said Michael Nehf, executive director of the $10 billion system. Consultant William M. Mercer had advised the system earlier this month to terminate the manager, which runs $283 million in active international core value equities and $57 million in emerging market equities. The fund will review the manager's performance in a year.
N.Y. State Teachers to get international equities shortlist
ALBANY, N.Y. - New York State Teachers' Retirement System will conduct an invitation-only search for two managers to manage up to a total of $500 million in enhanced passive international equities, said Dave Daly, fund spokesman. The $81 billion system's consultant, Evaluation Associates, will give the system a shortlist of managers. There is no timetable for making selections.
The searches are the result of a change in the target levels of the system's $9 billion international equity portfolios to 30% passive from 40% passive. Morgan Stanley managed 30% of the system's international equity allocation in an enhanced indexed strategy, but it will now manage 40% of the international equity allocation in an active strategy.
Bank of America, SEC settle D.E. Shaw disclosure case
CHARLOTTE, N.C. - Bank of America Corp. agreed to settle charges by the SEC that it failed to properly disclose and account for its investment in D.E. Shaw & Co. LP, a brokerage firm that incurred huge losses in trading derivatives in the late 1990s. The Charlotte, N.C.-based bank agreed to settle the charges without admitting to any wrongdoing on its part.
The SEC charged that Bank of America did not properly disclose these losses and their risk in its financial statements.
The agency also found that while the bank disclosed the advantage of its investment in D.E. Shaw in 1997 and 1998 in its financial statements, it failed to disclose the effect of the Asian financial crisis - and the resulting losses by D.E. Shaw - in the fall of 1998 that caused Bank of America to incur a $372 million writedown as of Sept. 30, 1998.
Hotchkis and Wiley to acquire Mercury HW fund assets
LOS ANGELES - Hotchkis and Wiley, which is buying itself back from Merrill Lynch, plans to acquire the assets of four Mercury HW Funds for its new Hotchkis and Wiley fund family, according to SEC filings. The four funds are: Large-Cap Value; Mid-Cap Value; Small-Cap Value; and Equity Fund for Insurance Cos. All four will have the Hotchkis and Wiley brand, pending shareholder approvals.
The funds are being managed by Hotchkis and Wiley as subadviser for Merrill Lynch's Mercury Funds until the buyback transaction closes in October.
George Davis, president of Hotchkis and Wiley, said there are no plans to launch any additional funds.
T. Rowe Price large-cap fund targets institutional clients
BALTIMORE - T. Rowe Price is set to launch the T. Rowe Price Institutional Large-Cap Growth Fund, which will have a minimum initial investment of $1 million, according to SEC filings. The mutual fund will be managed by Robert W. Smith.