News Briefs

AUSTIN, Texas — The board of regents of the University of Texas System approved a new compensation plan for investment staff of the $16.2 billion University of Texas Investment Management Co. The plan includes an incentive award based on the performance of each portfolio manager as well as the relevant asset class and UTIMCO overall. The new plan also uses peer competitive benchmarks. The previous plan was based solely on performance related to asset policy benchmarks and the achievement of individual, non-quantitative goals.

The plan, retroactive to Sept. 1, 2003, was passed by a 6-2 vote, according to Anthony deBruyn, UT System spokesman.

NEW YORK —Tom Hughes, global head of Deutsche Asset Management, has taken a "sabbatical leave of absence to deal with pressing family matters," according to a statement from Deutsche Bank.

Elaine Bartleet, Deutsche spokeswoman, would not elaborate on the reason for the sabbatical. Kevin Parker, head of equities at Deutsche's Corporate and Investment Bank, will permanently replace Mr. Hughes; Ms. Bartleet said Mr. Hughes will be returning to the bank. Anshu Jain, head of sales and trading, will take on Mr. Parker's responsibilities.

Mr. Hughes will remain a member of Deutsche Bank's Group Executive Committee; he "has value to add to the company in terms of his overall experience," Ms. Bartleet said.

BOSTON — Charles "Ed" Haldeman Jr., Putnam president and chief executive officer, announced Putnam will make more disclosures to mutual fund investors, the details of which were worked out with California's two largest public pension plans.

The disclosures include aggregate compensation for each fund's management team, the money senior managers have in Putnam funds, the amount paid in commissions to the firm's largest broker-dealers and enhanced information on investment staff changes.

At a joint news conference with Mr. Haldeman, California Treasurer Phil Angelides called the firm's disclosure commitments "a new set of best-in-class standards."

Mr. Angelides, who was joined by Jack Ehnes, CEO of the $114 billion California State Teachers' Retirement System, and Rob Feckner, board member of the $167 billion California Public Employees' Retirement System, said at a news conference that the added disclosure had helped address the concerns that led the two plans to withdraw a combined $1.5 billion from Putnam late last year, after the SEC accused Putnam of market timing.

Mr. Angelides said Putnam's rights to compete on an equal footing with other money managers for new mandates from CalPERS and CalSTRS have been restored.

Mr. Haldeman, in a telephone interview after the conference, promised further steps to restore Putnam's reputation.

"We are not even close to being done," he said.

FRANKFORT, Ky. — Stuart Reagan, chief investment officer of the $13 billion Kentucky Teachers' Retirement System, will retire at the end of November.

Paul Yancey, an in-house fixed-income portfolio manager, will take over as CIO in December, according to Mr. Reagan.

Gary L. Harbin, executive secretary, said fund officials will seek another person "to fill out" the system's internal management team, and there will be some reallocation of responsibilities, but no determination has been made.

Mr. Harbin said the retirement system is "losing a great chief investment officer" with the departure of Mr. Reagan, who became the system's CIO in 1981. He has "done a great job of putting the investment team together," Mr. Harbin said, adding Mr. Yancey is well versed in the board of trustees' investment policies.

Mr. Reagan said about half of the pension fund's assets are managed internally. The overall asset allocation is 55% equity, 35% fixed income, 7% cash and 3% real estate.

CHICAGO — An informational brief from United Airlines that said terminating its pension plans "is likely to be the best of a bad set of options" was ordered stricken from the record in U.S. Bankruptcy Court during a hearing Sept. 24 on the airline's Chapter 11 bankruptcy protection case. Chief Judge Eugene R. Wedoff granted a joint motion filed by the machinists and flight attendants union to strike the brief, filed by United parent UAL Corp. a day earlier.

"In terms of the propriety of an informational brief," Mr. Wedoff said, it is not appropriate for the debtor to set forth its position "on a matter that is in dispute," such as the status of the airline's pension plans.

United owes $563 million in pension contributions for the rest of this year and faces $4 billion in pension obligations through 2008. United plans had $6.96 billion in assets and $12.65 billion in liabilities as of Dec. 31, according to UAL's 10-K filing.

Separately, Mr. Wedoff set Oct. 27 as the starting trial date on the machinists' union request for a Chapter 11 trustee for the airline. "It is my sincere hope" that the hearing may be able to be avoided, Mr. Wedoff said. "That type of conflict has the potential of creating ill will that would be hard to overcome."

Jake Brace, United's executive vice president and CFO, concurred with the judge, adding: "We are not the moving party, the unions are. … Our door remains open" to the unions.

Sharon Levine, a director with the law firm Lowenstein Sandler, represents the machinists union, referred questions to International Association of Machinists spokesman Joseph Tiberi, who did not return a call seeking comment by press time. Sara Nelson Dela Cruz, spokeswoman for the Association of Flight Attendants, said that "ill will" between the airlines and labor unions speaks to the unions' call for new management.

LONDON — Delaware International Advisers management completed a $172 million buyout from parent Lincoln National Corp., and the manager will now be called Mondrian Investment Partners, said David Tilles, Mondrian's managing director and chief investment officer. The deal was first announced in May. Sixty staff members now hold 54% of Mondrian's equity; previously, 20 staff members held 15%, Mr. Tilles said. Private equity firm Hellman & Friedman bought the remaining 46%.

Mondrian has $26 billion under management, including $4 billion in subadvised assets for Lincoln and its subsidiaries, up from $23 billion in May.

CHARLOTTE, N.C. — Bank of America's wealth and investment management businesses will be relocated to Boston from New York and Charlotte. The firm also announced the creation of a new national business unit, based in New York, serving "ultra high-net-worth individuals."

The move to Boston follows criticism from Massachusetts officials earlier this year that Bank of America wasn't following through on promises made in press conferences following its acquisition of FleetBoston Financial to maintain employment levels in the Boston area.

Among officials moving to Boston will be Keith Banks, president of Columbia Management Group; Michael Santo, president of Banc of America Investment Services Inc.; and John Morton, president of the premier banking unit.

Alan Rappaport will lead the new ultra high-net-worth unit and will remain in New York.

NEW YORK — BNY Brokerage, a Bank of New York subsidiary, agreed to acquire Wilshire Associates' brokerage business, subject to NYSE approval, according to a news release from the two firms.

The deal includes Wilshire's execution and commission management assets. Terms were not disclosed.

As part of the agreement, Wilshire will not solicit clients of its other business units to use BNY Brokerage services, but clients of Wilshire Analytics that now use Wilshire's brokerage services will have the option of using BNY Brokerage.

BOSTON — Franklin Advisers and Franklin Templeton Alternative Strategies agreed to pay a total of $5 million in fines to the Massachusetts Securities Division for allowing investor Daniel G. Calugar to frequently trade in and out of the Franklin Small-Mid Cap Growth Fund in 2001 in exchange for investing $10 million in the Franklin Templeton Hedge Fund, according to an announcement by Massachusetts Commonwealth Secretary William F. Galvin. The Massachusetts statement said the two units of Franklin Resources also admitted allowing the activity despite prospectus language strictly prohibiting the practice, although the consent order conceded the firm admitted to Massachusetts statement of fact "solely for the purpose of settlement." In an 8-K filing to the SEC on Monday, Franklin said its two units "did not admit or deny engaging in any wrongdoing" but the company said it was its best interests to settle and move forward.

Franklin Advisers in August agreed to pay $50 million and change its compliance policies and procedures in a settlement with the SEC.

CHICAGO — Morningstar Retirement Manager, a new retirement planning service including advice and managed account assistance, is now available to defined contribution plan sponsors, said Kathryn Allyn, Morningstar Associates product development manager.

Services are available online, in print or through a call center. Early next year, Morningstar will also offer the service — including investment advice and managed account services — to individuals who have already retired as well as individual investors who do not receive Morningstar Retirement Manager through company-sponsored retirement plans. "We tried to help simplify for employees how to approach retirement and why they should invest in the first place," Ms. Allyn said.