GMAM combines units
General Motors Asset Management combined its global equity, fixed-income and trading business groups into a new public markets unit, according to an internal GMAM announcement. The new unit will be responsible for all of GMAM's asset management and trading activities involving publicly traded securities.
Tony Kao, former managing director and head of fixed income, was promoted to senior managing director and will head the new public markets group, said Gina Proia, spokeswoman. He will report directly to Nancy Everett, GMAM CIO. The reorganization comes one month after the departure of David Holstein, former managing director of public equities. Mr. Holstein's responsibilities have been incorporated into Mr. Kao's new position, said Ms. Proia. GMAM manages assets for the $100 billion General Motors pension fund.
Delphi holdings an issue
The $7.7 billion Teachers' Retirement System of Oklahoma will monitor active domestic value equity manager Hotchkis and Wiley Capital Management, which runs $800 million in large-cap and $340 million in midcap equity, because of the manager's holdings in Delphi, said Tommy C. Beavers, executive secretary.
2100 Capital buys stake
2100 Capital Group, the alternative investments subsidiary of Old Mutual Asset Management, acquired a controlling stake in Larch Lane Advisors, a hedge fund of funds and hedge fund incubator firm, said William Landes, 2100 Capital CEO. Terms were not disclosed.
Larch Lane will complement 2100 Capital's efforts to develop multistrategy hedge fund products, tapping its own capabilities and the hedge funds being run by Old Mutual's stable of money managers, Mr. Landes said in a telephone interview. Even before 2100 Capital became an Old Mutual subsidiary in April, his company had planned to acquire those fund-of-funds and seeding capabilities, he said.
KPERS hires search firm
Kansas Public Employees Retirement System hired executive search firm EFL Associates to assist with the $11.5 billion pension fund's national search for a CIO. Scott Peppard has been acting CIO since Rob Woodard left earlier this month.
Franklin, AMVESCAP report
Franklin Resources reported $453.1 billion in assets under management as of Sept. 30, up 7% from the previous quarter and 25% from the year before. Net income for the latest quarter was $334.5 million, up 28% from the previous quarter and 78% from the year before. Net sales were $8 billion in the third quarter, compared with $7.7 billion for the prior quarter and $6.6 billion for the previous year.
Separately, AMVESCAP, parent of the AIM mutual fund family and institutional unit INVESCO, reported $380.5 billion in assets as of Sept. 30, up 2% from the prior quarter but down 0.4% from the year before. AMVESCAP reported a $119.7 million profit before taxes for the quarter ended Sept. 30, up from $81.3 million for the year before, before settlement charges for regulatory issues.
AIM's U.S. assets for the third quarter rose by $100 million to $128.7 billion but fell 6.4% from the year before. The third-quarter increase came from market gains, which offset net outflows. INVESCO's U.S. assets increased by $400 million in the third quarter to $117.2 billion, but fell 3.1% from the year before.
3 funds contribute
Boeing, Northrop Grumman and Georgia-Pacific all reported third-quarter pension contributions.
Boeing made a $1.4 billion discretionary contribution, bringing total contributions for first nine months to $1.8 billion, the company reported in an SEC filing. Company officials plan to contribute $500 million in 2006, including an estimated required contribution of less than $50 million. They will consider additional discretionary contributions next year, the filing said.
Boeing's pension asset returns exceeded 14% for the year ended Sept. 30, "well above the company's 8.5% expected rate of return," according to the report. The company is likely to keep the 8.5% return assumption for 2006, James Bell, CFO, said in a webcast Oct. 26. Because of the decline in long-term interest rates this year, however, company officials expect to lower the discount rate used to value pension liabilities to 5.5% for 2006 from 5.75%, the report said.
Boeing has $41 billion in pension assets, according to a P&I report in April. As of Sept. 30, 2004, it had $42.7 billion in pension liabilities, according to its 10-K report.
Northrop Grumman expects to contribute a total of $205 million to its $17.7 billion pension plans in 2005, according to the company's SEC filing. As of Sept. 30, the firm contributed $181 million. In the first nine months of the year, the pension plan had investment losses of $367 million, according to the SEC filing. The 2005 contributions reflect a $15 million increase in pension expense due to changes in actuarial assumptions that were only partially offset by actual 2004 asset returns of more than 13%.
Georgia-Pacific plans to contribute $125 million to its pension plans in the fourth quarter, according to the company's third-quarter report filed with the SEC. The filing said the company contributed a total of $103 million during the first nine months of this year.
Georgia-Pacific had nearly $3.8 billion in total pension assets and about $4.6 billion in pension liabilities as of Oct. 31, 2004, according to the company's annual report.
S&P 500 funding to fall
Pension funding levels of S&P 500 companies are expected to weaken by the end of the year, according to a report by Credit Suisse First Boston. The report, by CSFB research analysts David Zion and William Carcache, said underfunding will reach $218 billion, an increase from $165 billion at the end of last year.
The plans' total funding level will drop to an estimated 85% at year's end, compared with 89% at the end of 2004. The report estimates that 325 of the S&P companies will have underfunded pension plans at year's end, compared with 319 the year before.
"A flat stock market, combined with a growing pension obligation, does not bode well for the health of defined benefit pension plans," said the report.
The estimates are based on a 2% return assumption on pension assets, based on the plans' average asset allocation of 62% equities, 29% bonds; 3% real estate and 6% other.
New executive director
Patricia Robertson was promoted to executive director of the $17.5 billion fund Public Employees' Retirement System of Mississippi. She replaces Frank Ready, who retired in early summer. Ms. Robertson was a deputy director; her responsibilities will be absorbed by the remaining staff. Denise Owens-Mounger was interim executive director and will return to her position as a deputy director.
Matza quits Neuberger
Robert Matza resigned as president and COO of Neuberger Berman Inc., said spokesman Randall Whitestone. He was replaced on an interim basis by Chairman Jeffrey Lane.
