Big changes at Arizona
The $19 billion Arizona State Retirement System is issuing RFPs for up to three investment managers to run a total of $1.7 billion in active domestic large-cap core, value or growth equities, said CIO Paul Matson. Funding will come from terminating an $825 million active domestic large-cap core equity portfolio managed by Mellon Equity and a $900 million active domestic large-cap core equity portfolio run by J.P. Morgan Fleming. The search is being conducted due to "marginal performance," but Mellon and J.P. Morgan Fleming have been asked to rebid, he said. RFPs are available at www.asrs.state.az.us, he said. The deadline is July 14.
Arizona also plans to issue RFPs within the month for a firm to advise on finding a replacement for LeRoy Gilbertson, who will retire as director of the system on Jan. 6.
The system also hired four active domestic midcap equity managers and created an internally managed enhanced passive midcap equity portfolio, Mr. Matson said. Forstmann-Leff and Frontier will manage $71 million each in growth; Franklin Associates, $212 million in core; and Wellington, $94 million, core. The internal portfolio is $260 million in value equity, he said.
San Francisco's new targets
The $11 billion San Francisco City & County Employees' Retirement System approved new sub-asset category targets for U.S. equities that could lead to several searches, most likely for an active large-cap value manager and an enhanced index manager, said Al Casciato, board president. Staff also recommended reducing the core EAFE component as well as emerging and small-cap equity targets in the international portfolio and adding a value-oriented EAFE manager. The board will decide at its Aug.6 meeting how best to implement the new targets and whether RFPs should be issued, said Clare Murphy, executive director.
Separately, the fund renewed its contract with Towers Perrin as consulting actuary for one year, said Ms. Murphy. Also, an agreement in principle was reached to retain alternatives consultant Cambridge Associates, and officials expect to sign a one-year contract shortly, said Mr. Casciato.
Northrop must pay: Court
A U.S. District Court in Pittsburgh has held Northrop Grumman responsible for paying subsidized early retirement benefits to employees of an electronic sensors and systems division it acquired in 1996. Northrop is expected to appeal. The decision could have enormous implications for "old economy" manufacturing companies such as steel and automakers, which routinely included such plant shutdown benefit provisions in their pension plans.
Nicholas-Applegate taps CIO
Horacio Valeiras will become CIO of Nicholas-Applegate Capital Management on Aug. 5. He replaces Catherine Somhegyi-Nicholas, who will concentrate on managing global equity portfolios. Ms. Somhegyi-Nicholas now holds both the CIO and lead portfolio manager positions.
Mr. Valeiras was head of the global core equity team at Morgan Stanley; his replacement hasn't been named.
Shields quits Citizens
John Shields, president and CEO of Citizens Funds, left the firm following the expiration of his three-year contract. He was not available by press time for comment. A five-member operating committee will assume his duties.
Ondeo Nalco outsources
Ondeo Nalco hired Northern Trust to run its $250 million pension plan as a manager of managers, said Todd Hacker, treasurer. Plan officials outsourced manager hirings and performance monitoring to gain better expertise, he said. Northern Trust will begin searches for new managers within the next two months, but details have not been determined, he said.
Carret buys Manchester
Carret and Co. acquired equity manager Manchester Capital. Terms were not disclosed. Wayne S. Reisner, Manchester president and CEO, and other principals will join Carret.
New fixed-income firm
James Midanek and John Pak formed Midanek/Pak Advisors, a manager that will start with short-duration cash management and move into core bond management for institutional investors as assets grow, said Mr. Midanek, portfolio manager. They also plan to develop mutual fund clones of the strategies.
Sources say the two were terminated from Turner Investment Partners, where Mr. Midanek was a managing director and CIO for fixed income and Mr. Pak was a senior portfolio manager.
Coke taps LM Capital
Coca-Cola hired LM Capital Group to manage $15 million in active opportunistic core fixed income for its $737 million pension fund.
Fund bundles with Fidelity
North Jersey Media Group hired Fidelity as bundled provider of its $75 million 401(k) plan, said Charles W. Gibney, executive vice president and CFO. Fidelity replaces SEI. Investment options will increase to 12 from eight.
Scott Sunshine, spokesman for SEI, did not return calls seeking comment by press time.
Rotary seeks CFO
Rotary International is searching for a CFO to replace Ladd Waldo, who is leaving. Mr. Waldo was unavailable for comment.
The CFO oversees treasury operations and investments, including more than $600 million in foundation and pension funds, said David Lewis, assistant investment manager. The Rotary Foundation has $540 million in assets; the Rotary International staff pension fund has $22 million; and Rotary International has $70 million in an operational fund. Interested parties may contact Rotary.
Maynard to Ga. Firefighters
James Maynard was named secretary and treasurer of the Georgia Firefighters' Pension Fund, overseeing the plan's $450 million in investments. Mr. Maynard replaces John C. Kilpatrick Jr., who left late last year. Mr. Maynard had been director of trust investments at BellSouth before starting his own alternative investment consulting firm.
"I had a desire to get back to the plan sponsor side," he said.
McMorgan co-founder dies
Thomas A. Morton, co-founder and former chairman of McMorgan & Co., died of cancer June 29. He was 78. Mr. Morton is survived by his wife, Helen, eight children and 16 grandchildren. His sons, Paul and Brian, both work at McMorgan, which was acquired last year by New York Life. A memorial service will be held July 9 at St. Mary's Cathedral in San Francisco.
Bond managers to Henderson
Harry Resis was named director of U.S. fixed income at Henderson Global Investors, and Daniel Doyle was named director of U.S. credit, new positions. They will manage U.S. fixed-income portfolios. Mr. Resis was head of the high-yield team and Mr. Doyle was a high-yield portfolio manager at Deutsche Asset Management. John Sharman, Henderson's global head of fixed income, said the firm plans to build a U.S.-based fixed-income operation.