Advance Investment closing
Advanced Investment Management will close by the end of the month, said J. Thomas Allen, who resigned last month as the firm's president and chief executive. The decision follows suits filed earlier this summer by the $1.1 billion Minneapolis Employees' Retirement Fund and the $800 million Minneapolis Teachers' Retirement System, which allege the firm violated investment guidelines by using too much leverage in its enhanced index strategy.
Barr leaves Deutsche Asset
Dean Barr, global CIO at Deutsche Asset Management, resigned. Spokeswoman Missy DeAngelis said his departure was by mutual agreement. Mr. Barr's plans were not known and he could not be reached by press time. His role will not be filled directly.
Okla. Teachers hikes equities
The $5.4 billion Oklahoma Teachers' Retirement System increased its equity allocation to 70% of total assets, up from 65%, reducing its fixed-income allocation to 30% of assets, from 35%, said William Puckett, CIO. The money will be shifted to international, domestic small-cap and domestic midcap equities. Marquette is advising.
Oregon terminates Peachtree
The $33.1 billion Oregon Public Employees Retirement Fund terminated Peachtree Asset Management for performance; the manager ran $178 million in active domestic equities benchmarked to the Russell 1000, said Mike Mueller, interim director of investments.
The system also placed Alliance Capital Management on watch for a $425 million active domestic large-cap equity portfolio because of concerns that portfolio manager Al Harrison may be distracted by ongoing Enron Corp. events, Mr. Mueller said. Becker Capital Management, which runs a $239 million active domestic small-cap value portfolio, also was put on watch because of long-term performance concerns, Mr. Mueller said.
Officials from Peachtree, Alliance and Becker did not return calls by press time.
South Carolina may hire 2
South Carolina Budget and Control Board's investment committee recommended hiring TimesSquare Capital Management to run $100 million in active domestic small-cap growth equities and Benson Associates to handle $100 million in active domestic small-cap value for the $21 billion South Carolina Retirement System, Columbia, said Michael Sponhour, spokesman. The full board will consider the recommendation at its Sept. 17 meeting. Mercer is assisting.
CalPERS appeal set
The California Court of Appeals slated oral arguments for Nov. 13 on a lawsuit blocking pay hikes for 10 CalPERS internal portfolio managers. Last October, a Superior Court judge had ruled the $136 billion fund attempted to circumvent state law by setting up its own payroll system to pay the employees; CalPERS appealed. State Controller Kathleen Connell, who had refused to grant the pay increases, sued CalPERS for issuing the checks directly.
Alaska puts Lowe on watch
The $10.5 billion Alaska State Pension Investment Board put Lowe Enterprises Investment Management on watch because TIAA-CREF agreed to buy a 49% minority stake in the real estate advisory firm. "It's no reflection on Lowe," said Lee Livermore, CIO. "All managers automatically go on the watch list for 18 months when there are ownership changes." Lowe manages $200 million in a core separate account for the system.
Simms loses mandate
Manchester (Conn.) Retirement Allowance Fund terminated the $5 million international portion of an active global growth equity portfolio run by Simms Capital, leaving it with $5 million in active domestic large-cap growth equities, said Alan Desmarais, director of finance. The $85 million pension plan also wanted to move the assets into international value equities, said Rob Huestis, chairman. The money will be added to an active international large-cap value portfolio managed by Causeway Capital. Prime Investment Consulting Group advised.
PWBA OKs liability limits
The PWBA will allow actuarial consulting firms and other service providers to ask plan sponsors to sign off on clauses limiting the actuaries' liability.
However, the agency continued, plan sponsors have a fiduciary duty to try to obtain comparable services at comparable costs from providers not requiring such clauses.
In an advisory opinion requested by the $6.5 billion Central Pension Fund of the International Union of Operating Engineers and Participating Employers, the Labor Department said it does not believe most indemnification limitations are imprudent or unreasonable under federal pension law. However, "provisions that purport to apply to fraud or willful misconduct by the service provider are void as against public policy, and it would not be prudent or reasonable to agree to such provisions," Louis Campagna, chief of the division of fiduciary interpretations, wrote.
The fund requested the advisory opinion after its former actuary, Watson Wyatt Worldwide, wanted its clients to limit its liability to $250,000, or one year's fees.
In a related development, the $130 million pension fund of Operating Engineers, Local 77, hired Savitz as its consulting actuary, Savitz replaces Watson Wyatt, which had insisted on limiting its liability.
Arkansas plan courts director
David Malone, executive director of the $360 million University of Arkansas Foundation, has been offered the same position at the $7 billion Arkansas Teacher Retirement System. The system's board gave Mr. Malone until Sept. 5 to decide. The annual salary at the Arkansas Teachers fund would be $100,199; he makes $128,390 now, Mr. Malone said. Retirement system trustees asked the Arkansas Legislature to raise the salary to $150,000 a year, effective July 2003.
Fund taps Oak Brook Bank
Bellwood (Ill.) Police & Firemen's Pension Funds is allocating its entire $7 million equity portfolio to Oak Brook Bank, which already handles most of the $17 million plan in a fixed-income portfolio, said John V. Franch, treasurer. Oak Brook will manage $4 million in domestic large-cap equity, $2 million in domestic midcap to small-cap equity and $1 million in international equity.. The plan terminated equity manager Edward D. Jones because of personnel changes, he said.
Federated forms 2 units
Federated Investors restructured its business into two investment units, global equity and global fixed income. The move combines domestic and international units.
Stephen Auth was named CIO of global equity, William Dawson was named CIO of global fixed income and J. Thomas Madden was named vice chairman of investment management. Mr. Auth was senior vice president and director of global portfolio management; Mr. Dawson was director of fixed income; and Mr. Madden was CIO of domestic equity, high-yield and asset allocation investing.
Henry Frantzen, CIO of Federated's global equity and fixed-income assets, is retiring in November.