Assets under management at Barclays Global Investors, San Francisco, increased 20% during 2006, growing to $1.814 trillion as of Dec. 31, said BGI spokesman Lance Berg.
Exchange-traded funds accounted for the lion’s share of the growth: The firm’s iShares increased 49% to $287 billion. Actively managed strategies rose 23% to $419 billion; indexed assets were up 13% to $1.08 trillion. Net inflows were $68 billion, down 23%, partly due to a pickup in outflows from indexed strategies, said Mr. Berg.
BGI’s profit before taxes for the year came to $1.3 billion, up 32% from the year before, with revenue of $3.1 billion, up 28%.
Also, Allianz Global Investors, Munich, reported e971 billion ($1.28 trillion) in assets under management as of Dec. 31, up 3% from the year before, the firm announced at a news conference. Operating profits rose 14% to €1.28 billion from a year ago.
AGI — the asset management arm of Allianz SE — includes PIMCO, NFJ Investment Group, RCM Capital Management, Nicholas-Applegate and Oppenheimer Capital. In the U.S., third-party assets under management totaled e435 billion as of Dec. 31, down from e443 billion at the year-end 2005.
Chief executive officer Joachim Faber said the firm plans to attract new asset inflows by leveraging its good performance record — 91% of third-party fixed income and 70% of third-party equity assets outperformed the benchmarks over a three-year period. Expansion in key markets such as Germany and the rest of Europe, the U.S. and Asia is another key to growth.
Separately, MassMutual Financial Group, Springfield, Mass., reported a record $456 billion in assets under management as of Dec. 31, up 15% from a year earlier, said spokesman Mark Cybulski. The assets include those run by subsidiaries OppenheimerFunds, Babson Capital Management and Baring Asset Management. MassMutual does not break out assets by subsidiary.
Judge overturns Illinois’ Sudan divestment law
CHICAGO — A federal court judge has overturned an Illinois statute requiring state public pension funds to divest investments in companies with ties to Sudan.
“The act violates federal constitutional provisions that preclude the states from taking actions that interfere with the federal government’s authority over foreign affairs and commerce with foreign countries,” Judge Matthew F. Kennelly of U.S. District Court in Chicago wrote in his ruling Feb. 23.
Under the law, public pension funds in the state were required to divest 60% of their Sudan-related investments by Jan. 27 and would be required to divest the rest of such investments by July 27.
The $39 billion Illinois Teachers’ Retirement System, Springfield, estimates the law cost it $2.1 million, including opportunity and brokerage costs, for compliance, said Eva Goltermann, public information officer. The teachers’ fund “will look to our internal counsel” on how to proceed, she said. “There is always the possibility an appeal will be made. We have to take great care to comply with this law and we feel the need to proceed cautiously with any changes.”
The $11.9 billion Illinois State Board of Investment, Chicago, “has borne a real measurable cost as a result of the law,” said William R. Atwood, executive director. The estimated costs include $800,000 in investment transaction costs, $50,000 in legal fees and incalculable staff time, Mr. Atwood said. “Our biggest concern is whether there will be an appeal or whether the General Assembly will rewrite the legislation and pass a different Sudan bill.”
Robyn Ziegler, spokeswoman for Illinois Attorney General Lisa Madigan, one of the defendants in the suit, said: “We’re reviewing the decision and will be discussing next steps and possible appeal” with state Sen. Jacqueline Collins, who sponsored the Sudan divestment bill.
Arizona fund plans to add GTAA manager to run $1 billion
PHOENIX — The Arizona State Retirement System is conducting an invitation-only search for a global tactical asset allocation manager to run approximately $1 billion, according to Gary Dokes, chief investment officer of the $25.5 billion fund.
Funding will come from terminating Goldman Sachs Asset Management, which managed $1.4 billion in a similar style. Roughly $400 million of that mandate will go to Bridgewater Associates, the fund’s other GTAA manager. Goldman Sachs was terminated in part for performance, Mr. Dokes said. Andrea Rafael, spokeswoman for Goldman Sachs, was unavailable for comment.
Consultant Mercer Investment Consulting is assisting.
Also, plan officials decided at the fund’s Feb. 16 board meeting to terminate Batterymarch from a $140 million active domestic small-cap growth equity portfolio and give the money to current manager TimesSquare Capital Management, which will now run roughly $280 million in the same style. The fund’s total allocation to small-cap is about $1.7 billion. Batterymarch was terminated for performance, Mr. Dokes said. Dan Kelly, spokesman for Batterymarch, declined to comment.
And separately, the Arizona Legislature is considering a bill that would raise the foreign investment ceiling for the state retirement system to 35% of assets from 20%. If passed, the bill would likely go into effect in July, Mr. Dokes said. He declined to comment further.
Deere to add $171 million to pension plans this year
MOLINE, Ill. — Deere & Co. expects to contribute $171 million to its pension plans in 2007, according to Deere’s annual report. Last year, it contributed $68 million. The company had a total of $8.9 billion in worldwide pension assets and $8.7 billion in pension obligations as of Oct. 31, the report said.
Deere contributed $100 million to its defined contribution plan in 2006 and $81 million in 2005, according to the report. It did not project DC contributions for 2007. The company’s 401(k) plan had $3.05 billion in assets as of Sept. 30, according to information the company submitted to Pensions & Investments.
SureWest Communications to freeze pension plan
ROSEVILLE, Calif. — SureWest Communications will freeze its pension plan on April 1, confirmed Karlyn Oberg, director of investor relations.
The telecommunications holding company offers a combined ESOP/401(k) plan that matches 100% of employee contributions up to 6% of pay. Company officials are considering enhancing the plan by adding features such as loan provisions, automatic enrollment and additional investment choices.
Cash contributions to the defined benefit plan have ranged from $3 million to $9 million over the past five years, and the annual service cost has averaged about $5 million over the same period.
As of Dec. 31, 2005 — the most recent figures available — SureWest had $113 million in DB assets and $65 million in defined contribution assets, Ms Oberg said.
