CalPERS reveals returns
CalPERS disclosed performance data for individual funds in its private-equity program. Top performers were: Information Technology Ventures, 90.1%; Conseco Capital Partners II, 89.6%; Doughty Hanson Fund II, 46.7%; Candover 1994 Fund, 43.2%; Blackstone Capital Partners II, 39.9%; and Media Communications Partners II, 39.2%. At the bottom: LM Capital Fund II, -59%; Kid Kamm Equity Partners, -46%; and INROADS Capital Partners, -28%. The CalPERS board released the data as part of a settlement of a suit filed by the San Jose Mercury News.
Report: Simplify U.K. rules
The British government proposed to simplify pensions legislation and taxation, overhaul the national pensions regulator and establish a commission of inquiry into whether Britons should be forced to save for retirement, as part of the much-awaited green paper.
The paper did not propose to raise Britain's state retirement age or make any fundamental changes to the country's first-pillar state pension system.
LACERS cuts bonds
The $6 billion Los Angeles City Employees' Retirement System cut its target fixed-income allocation to 27% of plan assets, from 31%, and increased private equity and real estate to 7% each, from 5%. The board trimmed the portfolios of active domestic fixed-income managers Loomis Sayles and Lincoln to $572 million each.
Separately, the board put Loomis Sayles on probation, with a formal review in six months because portfolio manager Kent Newmark is retiring this month. The board also renewed its contract with INVESCO Realty Advisors.
Nashville plans fee study
The $1.3 billion Nashville & Davidson County Metropolitan Government Benefit Board hired Benchmark Financial Services to do an audit of fees the $1.3 billion pension fund pays to its money managers, said Karl F. Dean, director of law. Mr. Dean said the board wants to ensure it is paying fees as contracted and is not being overcharged. The study is an outgrowth of a 2000 KPMG audit that found inherent conflicts of interests, including soft-dollar and directed-brokerage arrangements, with PaineWebber, when it was the investment consultant to the fund for several years until it was dropped in 2000. That audit led to a $10 million settlement this year by UBS PaineWebber, the successor to PaineWebber, and its then-consultant William Keith Phillips.
Teachers drops managers
The $21 billion Illinois Teachers Retirement System terminated AllianceBernstein, which ran $636 million in active domestic large-cap value equities, because of concerns over pending Enron litigation, according to a statement from the system. Hired as partial replacements were Bear Stearns and Boston Partners, which will run $415 million each in the same asset class.
"We're surprised by the development, given the excellent performance over the course of the relationship. Enron was not a stock ever owned in this portfolio," said Marc Mayer, AllianceBernstein executive vice president of marketing and sales.
Trustees also reduced the system's fixed-income allocation to 26% from 35%. They terminated Chicago Capital, which ran $675 million in active domestic bonds, and Julius Baer, which managed $612 million in active international bonds.
BlackRock, which manages $1.7 billion in active domestic fixed income, was placed on watch because of benchmark underperformance. The system also took two firms off watch for improved performance: Geewax Terker, which manages $291 million in active domestic large-cap growth equities, and UBS Global Advisors, which handles $630 million in active international fixed income.
Separately, Oak Associates, which ran $102 million in active domestic large-cap growth equities, was terminated for performance. The assets were awarded to existing large-cap growth manager MFS. Sandra Knoll, a spokeswoman for Oak, declined to comment.
Mazama Capital Management and J.&W. Seligman were awarded $152 million each in active domestic small-cap to midcap growth equities as part of earlier asset allocation restructuring. Funding came from fixed income.
Callan was retained as consultant.
Oregon hires 2 managers
The $36 billion Oregon Public Employees Retirement Fund hired MFS and Aronson to run $300 million each in active domestic large-cap value equities. Frank Russell assisted.
PBGC, company settle
The PBGC reached an agreement over a pension plan formerly sponsored by Frontier Corp., a unit of Global Crossing that was sold last year to Citizens Communications. Under the deal, Citizens will assume responsibility for funding the plan, which has assets of $473 million and liabilities of $578 million, and the PBGC will withdraw its request to take over the plan. Global Crossing earlier had attempted to transfer the pension plan's assets to a liquidating trust.
Texas fund shifts bonds
The $1.2 billion San Antonio Fire & Police Pension Fund hired Banc One and EARNEST Partners to manage $100 million each in active domestic core fixed income, said Warren J. Schott, investment officer. Funding came from terminating two other bond firms. Mr. Schott declined to give further details, but a Nelson Information directory lists Bradford & Marzec, Loomis Sales and Mac Kay Shields as the fund's bond managers.
Salomon Smith Barney advised.
Minnesota drops MetWest
The $35.1 billion Minnesota State Board of Investment terminated Metropolitan West Asset Management, which ran $300 million in core bonds.
Montana keeps Pyrford
The $5 billion Montana Board of Investments retained Pyrford as manager of $100 million in active MSCI European equity, said James Penner, CIO.
Cornerstone to buy PMRealty
Cornerstone Real Estate Advisors plans buy PMRealty; terms were not disclosed. PMRealty has been on the block since spring, and Aberdeen Property Investors had planned to acquire PMRealty by year's end. But the deal apparently fell through after several PMRealty senior executives defected in the fall for other firms.
Fund taps new actuary
Local 363 Pension Fund "E" hired First Actuarial Consulting as consulting actuary. The $27 million plan terminated Watson Wyatt after the firm asked it to sign a formal letter accepting liability limits, and asking for an indemnification from lawsuits over its work.
Dewey Dennis, founder of First Actuarial, quit as a consulting actuary at Watson Wyatt over concerns about the firm's policy. "Our multiemployer book of business is essentially intact and we are moving forward in serving that market," said Bob McKee, a Watson Wyatt spokesman.
