CalSTRS on June 2 will consider adding Japan and Australia as approved locations for its global private equity investments. The $115 billion pension fund currently limits private equity investments to the United States, Canada, United Kingdom and Europe. CalSTRS staff wants to "take a measured approach in expanding into new markets," according to a report to the board. The system has $1.35 billion in international private equity. Cambridge Associates and Altius Associates are assisting.
Many investment managers and mutual funds plan to make further reductions in their use of soft dollars in the next several months, a new Greenwich Associates report says. A decline in equity commissions and uncertainty about the legal future of soft dollars led to an 18% drop in soft-dollar volumes last year, according to the report.
Still, officials at about half the institutions interviewed were either "opposed" or "strongly opposed" to using hard dollars to pay for access to research and research services.
The £2.8 billion ($5.2 billion) Boots pension fund has switched 15% of plan assets into equities to "better match long-term liabilities," a statement from the company said. Boots, a British drug store chain, made waves when it moved completely into long bonds about three years ago.
Tyco International plans to contribute more than $500 million to its pension plans over the next six months, according to release. Last year, Tyco contributed $248.8 million to its U.S. plan and $92.6 million to its non-U.S. plan. The U.S. pension plan had assets of $1.50 billion as of Dec. 31; the non-U.S. plan had assets of $1.26 billion as of that date.
The $370 million Fort Lauderdale (Fla.) Police & Fire Retirement System is considering shifting half of a $46 million RhumbLine S&P 400 Midcap index portfolio to active management, said Lynn Wenguer, pension administrator.
"We're very happy with RhumbLine," she said, but trustees believe an active domestic small-cap to midcap manager could outperform the index. The board will review a short list in July. RhumbLine also runs $34 million in an S&P 500 index fund for the plan. Asset Consulting Group is assisting.
Sid McCausland will retire as chief executive officer of the $1.4 billion San Mateo County Employees' Retirement Association on March 31. A search for a successor is expected to begin shortly; no headhunter will be used. Mr. McCausland is best known for his unsuccessful fight against a $400 million raid on CalPERS, where he was executive director. That goal-line stand, combined with alienating state Treasurer Jesse Unruh, cost the feisty executive director his job in 1986.
The $31 billion Illinois Teachers' Retirement System put Ariel Capital and J.&W. Seligman on watch for performance, according to a statement. Ariel runs $379 million in active domestic small-cap value equities; Seligman, $258 million in active domestic small-cap to midcap growth equities.
Ariel's "very conservative" value style is often left behind in "roaring markets" like the one seen in 2003, said Peter Thompson, Ariel executive vice president. Ariel's composite small-cap value performance for the year as of April 30 was 4.7%, he added. Maryann Susco, spokeswoman for J.&W. Seligman, did not return a call seeking comment by press time.
The fund also committed $220 million to an existing Capri/Capital Advisors core real estate portfolio, increasing that investment to $1 billion, said John Day, spokesman. Separately, the plan moved $150 million from active domestic large-cap growth manager Geewax Terker to Holland Capital, to run in a similar portfolio. Geewax now runs $450 million; Holland now runs $300 million.
Donaldson Co. hired Silver Creek Partners to run $15 million in a hedge fund of funds for its $150 million pension plan, said Rich Sheffer, assistant treasurer and director of investor relations. Silver Creek replaced Glenwood Capital, which was terminated following management changes at the firm, Mr. Sheffer said. Jeffrey Slocum & Associates assisted.
Creighton University hired Marsico Capital to run $15 million in active domestic large-cap growth equities for the $212 million endowment, said Leroy Galles, associate vice president for finance. Funding came from reducing to $25 million a similar portfolio run by TCW. Fund officials wanted to diversify, Mr. Galles said. Fund Evaluation Group assisted.
The $1.3 billion Missouri Highway & Transportation Employees' & Highway Patrol Retirement System hired Summit Strategies as investment consultant, said Larry Krummen, CIO. Summit replaced Asset Consulting Group. Summit is now conducting an asset-liability study with plan actuary Gabriel, Roeder, Smith; results are expected in September.
Separately, the plan hired its first core real estate managers; it committed $50 million to the Principal U.S. Property Account, and Mr. Krummen declined to provide the amount committed to ING Clarion's Lion Property Fund. Funding will come from rebalancing.
The $44 billion Oregon Public Employees Retirement Fund committed $50 million to the $300 million Guggenheim Structured Real Estate Advisors fund, which will invest in structured debt secured by domestic real estate. Pension Consulting Alliance was the consultant. Separately, the pension fund took Clarion Partners, which manages $500 million in core real estate, off its watch list.
Oklahoma Gas & Electric hired Julius Baer to run $36 million in active international equities for its $371 million pension plan, said Margaret Walsh, manager of benefits. The plan terminated AMR Investment; it had $36 million invested in the American AAdvantage International Equity mutual fund, Ms. Walsh said. Trustees concluded that an actively traded separate account could deliver better returns, she said. MAI Investment Consultants assisted.