Pension funds watch suits
Public and union pension funds are keeping an eye on three lawsuits filed in U.S. District Court in Brooklyn seeking slavery reparations from Aetna, CSX and FleetBoston Financial. The suits allege the three companies profited from the slave trade between 1619 and 1865.
New Jersey State Sen. Robert W. Singer said, depending on how the suits go, the state may decide to divest itself of companies that profited from the slave trade.
Brandon Rees, a research analyst for the AFL-CIO Office of Investment, said the lawsuits underscore the need for corporate responsibility to inform shareholders of potential litigation risk and to minimize those risks.
LTV plans fall on PBGC
The PBGC took over three underfunded pension plans of bankrupt steelmaker LTV, its largest pension fund takeover. The funds have assets of about $2.2 billion and liabilities of $4.4 billion, according to PBGC estimates.
Florida's Herndon retiring
Tom Herndon will retire as executive director of the $96 billion Florida State Board of Administration on June 28. Mr. Herndon, who took the job in 1996, said, "At 56, I'm still too young to permanently retire, but I am ready for something new and challenging.
"It's time for me to do something else."
Coleman Stipanovich, deputy executive director, is considered the most likely internal candidate to replace Mr. Herndon.
Irish fund hires 5
Ireland's National Pension Reserve Fund, with e8 billion ($6.3 billion) in assets, hired Capital International and Dresdner RCM to manage e420 million each in global equities. The plan also hired Bank of Ireland Asset Management, BlackRock International and Putnam to run e350 million each in pan-European equities.
Trustees plan to announce appointments for seven specialist equity mandates in the next few weeks, said a source close to the discussions.
Separately, ABN AMRO Mellon was named global custodian, and Morgan Stanley International was hired for transition management.
Philipp leaves Deutsche
Michael Philipp resigned from Deutsche Bank as global head of asset management and wealth management services. Mr. Philipp also was chairman of the private client and asset management operating committee.
Mr. Philipp's responsibilities will be split into two positions, said Ronald Weichert, Deutsche Bank spokesman. Thomas Hughes will be global head of asset management, and Pierre de Weck will be global head of private wealth management and committee chairman. Mr. Hughes was president and COO at Deutsche Asset Management; Mr. De Weck was CEO of UBS Capital but left the firm in July.
Mr. Philipp will remain a senior adviser at Deutsche.
Avon drops 2
Avon Pension Fund, Bristol, England, terminated Gartmore and Merrill Lynch, said Tony Worth, investment officer at the L1.48 billion ($2.1 billion) fund. Gartmore ran L450 million in a passive TAA portfolio, and Merrill managed L450 million in an active multiasset portfolio.
The plan hired Capital International to manage a L518 million active multiasset portfolio; Threadneedle Asset Management, L207 million in active U.K. equities; and Wellington Management International, L162 million in active international equities. Incumbent manager BGI, which manages a L444 million passive multiasset portfolio, was hired to run a L118 million passive bond portfolio.
Northern in China deal
Northern Trust agreed to provide custody and investment management knowledge to Bank of Communications in China, the fifth-largest bank by assets in China and one of the five custodian banks approved for domestic investors.
CII calls for expensing options
Council of Institutional Investors members voted to support efforts to get companies to include the cost of stock options as an expense on their reported income statements. In the mid-1990s, the council opposed a Financial Accounting Standards Board proposal to require companies to expense the estimated fair value of all option awards. FASB ultimately backed off from requiring all options to be expensed.
"But times have changed since the initial debate," the council said in a statement.
Hedge fund picked
The $1.3 billion Nashville & Davidson County Metropolitan Benefit Board committed $15 million to the Lynx Fund, a hedge fund run by FIS Alternative Investment Strategies, said James Newberry, assistant CIO. Funding came from reducing an active domestic small-cap growth equity portfolio managed by Insight Capital, leaving it with $80 million; the portfolio was overweighted. Segal Advisors assisted.
Canadians lag in venture cap
Canadian pension funds lag behind their U.S. counterparts in venture capital investing, according to a study by Macdonald & Associates. Only 3% of the C$4.9 billion (US$3.1 billion) in new venture capital raised in 2001 came from pension funds - that's down from 11% in 2000 and 5.3% in 1999 - compared with 40% in the United States, according to the study.
55% see real estate hike
Some 55% of real estate executives expect real estate equity prices to increase by the end of this year, while 45% foresee a drop in values, according to a survey of 122 industry members by the Pension Real Estate Association.
The study also found 56% of respondents think pension funds' real estate allocations will remain steady in 2002, while 37% expect allocations to increase.
In addition, 73% see North America offering the best opportunities over the next two to three years, while 12% pick Asia. The multifamily sector is expected to offer the best returns.
C&C reviews DC options
Chapman & Cutler is reviewing the 12 investment options in its defined contribution plans, which have combined assets of $100 million, said Susan Gilbert, director of human resources and office services.
Pru names president
Bernard Winograd was named president of Prudential Investment Management and chairman of Prudential Real Estate Investors, both new positions. He was CEO of Prudential Real Estate Investors, where he will be replaced by Charles Lowrey, president of PREI.
Gartmore taps executive
Robert Wagner was named executive vice president at Gartmore Global Investments, a new position. He will head the newly formed Gartmore Emerging Managers. Mr. Wagner was president and CEO at consulting firm PMG Systems.
Lutherans alter plan
The Board of Pensions - Evangelical Lutheran Church in America hired Mellon Employee Benefits Services to provide daily valued record keeping for its $5 billion defined contribution plan.
The ELCA plan will increase investment options to 20 from seven.