At Deadline

Legg Mason will divide the Citigroup Asset Management business it acquired in June into two investment management affiliates and two new distribution units, according to a memo sent to employees last week.

An active U.S. equity investment management firm will be formed out of Citigroup Asset's "core" New York- and San Francisco-based active equity teams, while a separate international equity affiliate will be created out of Citigroup Asset's non-U.S. equity business. Each unit will have its own dedicated institutional marketing and client services operations, according to the memo.

Citigroup Asset has $437 billion in assets under management.

The memo also said officials from Legg Mason and its $229 billion fixed-income affiliate, Western Asset Management, "are working to establish the optimal approach for combining CAM's worldwide fixed-income business with WAM, to create the world's largest dedicated fixed-income investment management firm." Details were not disclosed.

International Association of Machinists and Aerospace workers at Boeing went on strike Sept. 2 after rejecting a proposed $6 increase in their pension benefit to $66 per month for each year of service, the top issue of contention with the company's contract offer.

The "company multiplier of $66 is insulting and is the lowest percentage increase ever since the plan was established in 1955 — even though it was your top issue," according to the union's statement to members. "Boeing could easily afford a $20 pension increase with no general wage increases ... "

Charles Bickers, Boeing spokesman, said, "We've always had a well-funded, well-managed, secure pension plan. We put $4.4 billion into our plans last year. We have said we'd put $1.6 billion into our plans this year. … Many companies in America have difficulty meeting their obligations to pensions. We've improved our pension, which is at a competitive level. We maintained a 401(k) match at 50% up to 8% (of pay). We think (our pension) is at a competitive level, and we want to make sure retirees can rely on the pension fund."

Allan Bufferd will retire as president and CIO of MIT Investment Management, which oversees $10 billion in endowment and defined benefit plan assets for the Massachusetts Institute of Technology, said Denise Brehm, spokeswoman. He is also stepping down as MIT treasurer.

Mr. Bufferd said he will stay on at MIT Investment until a successor is found or through the end of the coming academic year, whichever comes first.

MIT will hire an executive search firm to identify candidates, he said.

Susan Hockfield, MIT president, has announced that the MIT treasurer and investment functions will be split into two positions with Mr. Bufferd's retirement, Ms. Brehm said.

The $1.74 billion Seattle City Employees' Retirement System hired Wurts & Associates to conduct an asset allocation study, said Mel Robertson, assistant executive director.

The system has no consultant on retainer; Wurts was hired only to conduct the study. The results are expected to be presented at the board's Oct. 6 meeting.

Mr. Robertson said the board is considering expanding the system's 10% real estate allocation and reducing fixed-income exposure from the current 21%.

TIAA-CREF might liquidate or close to new investors several funds that have "consistently incurred (operating) losses under the current fee structure" after shareholders failed on Aug. 31 to approve a new investment management agreement with its Teachers Advisors unit, according to a statement from TIAA-CREF.

The funds are Growth Equity, International Equity, Small-Cap Equity, Large-Cap Value, Real Estate Securities, Social Choice Equity, Bond, Inflation-Linked Bond and Money Market.

Shareholders of some TIAA-CREF funds approved a new investment management agreement with Teachers Advisors that would address losses by raising fees.

Shropshire County (England) Pension Fund hired AXA Rosenberg Group to run £67 million ($123 million) in active European ex-UK equities, said AXA spokeswoman Wendy Sayer.

Fund officials replaced the portfolio's previous manager, Merrill Lynch Investment Managers, after conducting a review, said Graham Chidlow, head of finance for the £740 million fund.

MLIM spokeswoman Megan Frank couldn't immediately be reached for comment.

The $33.7 billion Public Employees Retirement Association of Colorado spent about $33.5 million, on administrative expenses in 2004, representing about 0.1% of total assets at year's end, according to a report issued by the state's Legislative Audit Committee.

The association "has a fiduciary responsibility to ensure that the funds are spent efficiently and effectively, and used prudently in all areas of operations," the report said.

The plan had an unfunded liability of $12.8 billion at the end of 2004.

The report details PERA's practices and polices related to gifts, travel expenses credit cards and automobiles, among other areas.

Ringway Group hired Investment Solutions to manage its three defined benefit plans, with combined assets of £10 million ($18.4 million), according to Richard Dinham, senior investment manager at Investment Solutions. Investment Solutions replaced several other managers; he was not able to supply additional information. Calls to Kelly Hocker, Ringway spokeswoman, were not returned by press time.

In a news release, Robin Withers, Ringway company secretary, said the multimanager approach would "simplify our investment manager arrangements."

The $1.7 billion San Mateo County Employees Retirement Association is searching for a manager to run $156 million in a domestic fixed-income enhanced indexing strategy, said David Bailey, CEO. No RFP will be issued; consultant Strategic Investment Solutions will handle the search and recommend candidates.

Funding will come from liquidating a $156 million U.S. fixed-income index fund run by Barclays Global Investors, Mr. Bailey said. The board reviewed its fixed-income structure and decided it could gain additional alpha by moving to an enhanced indexing strategy with little or no additional risk, Mr. Bailey said.

Fred Conley joined Genworth Financial as president and CEO of its recently formed Institutional Retirement Group, according to a news release. It is a new position.

Mr. Conley was executive vice president of institutional sales at CitiStreet.