Assets top liabilities
Pension fund asset growth outpaced liabilities in the first quarter of 2002, for the first time in nearly three years, according to Ryan Labs. Its liability index declined by 2.8% for the first three months of 2002, while all asset classes had small but positive returns during the period.
Coke forms ESOP
Coca-Cola redesigned the company stock portion of its $1.4 billion 401(k) plan as an ESOP and allowed for quarterly cash dividends as a result of the Economic Growth and Tax Relief Reconciliation Act of 2001.
Currently, 76% of the plan's assets are in company stock; the company match is in stock and must remain so until the participant reaches age 53. The company also switched to share accounting from unit accounting, allowing participants to receive quarterly dividends in cash.
2 managers terminated
Connecticut Retirement Plans and Trust Funds terminated Alliance and Dresdner RCM. Both ran active domestic small-cap to midcap equity portfolios. Alliance managed $135 million; Dresdner, $206 million. The money temporarily was shifted to an SSgA S&P 500 index fund.
Dawn Vroegop, Dresdner RCM spokeswoman, said "We understand and respect their decision. We hope to work with them again in the future." Calls to Alliance were not returned by press time.
German license OK'd
The German Chemical Employers Association, called the BAVC, and the Chemical Workers Trades Union, the IG-BCE, received the first license from the German insurance regulation office to set up a pension fund.
The Chemie PensionsFonds is likely to attract around 300,000 members from the chemical industry, said Jahn Burkhard, BAVC spokesman. Membership also will be extended to Germany's rubber, chemical and glass industries.
An investment commission will meet in the next month to discuss the investment strategy and select money managers.
New Boston Co. CEO
Corey Griffin was named president and CEO of The Boston Co. Asset Management, replacing Francis Antin, who was named chairman. Mr. Griffin will remain COO.
U.S. bond manager sought
The $45 million Gloucester (Mass.) Contributory Retirement System is searching for a manager to run $14 million in domestic core fixed income, replacing Freedom Capital. Requests for the RFP must be submitted in writing by April 17 to consultant Martin Coughlin at New England Pension Consultants, by mail or by fax at (617) 374-1313.
Oregon names interim CIO
Michael Mueller was named interim director of investments for the $45 billion Oregon Investment Council following the retirement of W. Dan Smith.
The $22.6 billion Illinois Teachers' Retirement System approved its second major restructuring since late 1999. Its domestic equity allocation increased to 41% of total assets, from 30%; international equity decreased to 15% from 20%; and fixed income dropped to 23% from 27%. The system's other allocations are 14% real estate, 6% private equity, 1% short-term investments.
Separately, Morgan Stanley was terminated for a $180 million allocation to small-cap and midcap equities, because of performance and concerns about organizational stability, said CIO Charles Self III. The assets will be managed temporarily in an SSgA S&P 500 index fund. Brett Galloway, Morgan Stanley spokesman, declined to comment.
New private equity exec
Marie Berggren was named manager of private equity investments for the University of California, Oakland. She was executive vice president and head of venture capital at Bank One. Heidrick & Struggles conducted the search.
CalPERS studies ADRs, realty
CalPERS' investment committee is expected to discuss on April 15 whether the fund's external international equity managers are permitted to invest in American and global depository receipts tracking stocks of companies based in countries not on CalPERS' permissible country list. Three of four CalPERS' new emerging markets managers said they would invest in ADRs and GDRs if allowed, and the staff notes such investments would lower the riskiness of the portfolios.
In addition, the investment committee will consider whether to boost leverage to 50% in its $8 billion core real estate portfolio, a move that could increase returns by 100 to 125 basis points a year while adding significant risk. The loan-to-value ratio for the core portfolio was increased to 40% in August, from 25%.
Staff at the $149 billion fund said low interest rates make using debt attractive. But higher leverage would make the portfolio more volatile and could reduce cash flows and increase refinancing risk, the staff notes.
Contribution may rise
Mercer recommended the county contribute $20 million this year to counteract last year's stock market performance; the county contributed $20.3 million in 1995. The 2001 contribution was $400,000, and the average from 1995 through 2001 was $9.4 million. Trustees will discuss the contribution at a May 15 meeting, said Jac Amerell, director.
Pliant launching study
Pliant Corp. is undertaking an asset allocation study of its $26 million pension plan, said Kurt D. Ogden, vice president-treasurer. The study is being conducted by SEI Investments, which recently replaced Bank of New York as manager and trustee. The study should be concluded in May.
Hedge funds of funds up
Hedge fund of funds growth surged last year, now comprising 15% of all hedge fund investments, according to the Hennessee Group's survey of hedge fund investors. In 2000, hedge funds of funds accounted for 3% of all hedge fund investments. Some 54%, of investors surveyed said they planned to increase their hedge fund investments in 2002, and 40% plan to increase their hedge fund of fund investments.
Marketing exec named
Jeffrey Swope was named marketing director at Fiduciary Asset Management, a new position. He was a regional institutional marketer at Provident Investment Counsel. Cromwell Partners assisted.
Invitational search coming
Chartered Township of Waterford, Mich., will conduct an invitation-only search for a manager to run $5 million in active domestic small-cap core equities for its $39 million pension plan, said Nancy J. Smith, chairwoman. Funding will come from cash and general rebalancing, she said. Portfolio Analytics will present a short list of managers to the board at its May meeting.
CIO leaves post
Dominic Caldecott is leaving his post as U.K. chief investment officer at Morgan Stanley Investment Management to focus on managing the firm's International Value Equity Fund. Jeremy Lodwick will succeed him.