MassPRIMs diversified program of hedge fund investments will remain well above its T-bills + 4 target return, even if PRIM recovers none of the $30 million the board had invested through collapsed hedge fund Sowood Capital Management, said Michael Travaglini, executive director of the $50 billion fund.
MassPRIM had invested with Sowood through hedge fund-of-funds manager Arden Asset Management. Sowood officials reportedly told clients that losses following recent credit market volatility amounted to almost three-fifths of the firms assets. Mr. Travaglini said its unclear exactly how much of its $30 million PRIM will recover.
CIO leaves French fund
Jean-Louis Nakamura left his post as CIO of the €33.4 billion ($46 billion) Fonds de Reserve pour les Retraites to become CEO of the €3 billion Supplementary Retirement Fund for Civil Servants, confirmed Pierre Braun, spokesman for the civil servants fund. Mr. Nakamura replaces Philippe Caila, who was appointed a deputy chief of staff under French President Nikolas Sarkozys administration. The civil servant fund, which aims to invest its entire portfolio according to socially responsible investing principles, was set up in 2005 as a mandatory defined contribution pension fund for government employees.
EARNEST on watch
The $12.7 billion Ohio Police & Fire Pension Fund put EARNEST Partners on watch for performance of a $399 million active domestic midcap core equity portfolio, said Dave Graham, a spokesman. The firm will be reviewed again in September or October to see if performance has improved, Mr. Graham said.
They took action based largely on first-quarter results, said Trey Greer, a partner at EARNEST Partners. Since then, weve seen the market reappraise risk, and the high-quality stocks we tend to buy have done much better than the overall market. Mr. Greer noted that since the end of the first quarter, the portfolio has outperformed its benchmark, the Russell Mid Cap index, by 400 basis points.
Active managers top EAFE
Two-thirds of active international equity portfolios outperformed the MSCI EAFE index return of 10.7% for the first six months of this year, according to a report by InterSec Research. The median portfolio posted a 17.3% return year-to-date as of June 30, buoyed by an average 5.8% exposure to emerging markets. The median active manager of emerging markets equities returned 18.2% year to date, and 40.6% for the three years ended June 30.
Bear Stearns outlook lowered
Standard & Poors Ratings Services lowered its outlook for Bear Stearns to negative from stable because the firms reputation has suffered from the widely publicized problems of its managed hedge funds, according to a statement from S&P. The rating agency, which affirmed its A+/A-1 rating on Bear Stearns, also viewed the company as a potential target of litigation from investors who have suffered substantial losses. Stocks fell sharply on Friday after S&P lowered the companys rating.
In a statement, Bear Stearns executives expressed disappointment with S&Ps decision. Contrary to rumors in the marketplace, our franchise is profitable and healthy and our balance sheet is strong and liquid, the statement said.
Fayette to sign on 2
The $46 million Fayette County Employees Retirement System plans to hire Gannett Welsh & Kotler to manage a small-cap core equity portfolio and Mondrian Investment Partners to run foreign equities, pending contract negotiations, according to consultant Morrison Fiduciary Advisors website. Neither Mark Roberts, controller and board secretary nor Frank Burnette, consultant at Morrison, returned messages by press time.
Conkey leaving Evergreen
Christopher Conkey, CIO of Evergreen Investments, is leaving the firm to pursue other opportunities, said spokeswoman Laura Fay. CEO Dennis Ferro has assumed the CIO responsibilities on an interim basis while Evergreen conducts a search for internal and external candidates. Mr. Conkey couldnt immediately be reached for comment.
Janus fund on watch
The $878 million City of Phoenix Deferred Compensation Fund put the Janus Mid Cap Value Fund on watch for performance, according to Kathy Walczak, benefits analyst. The fund will be reviewed again at the boards Aug. 16 meeting, along with the Turner Midcap Growth Fund, which the 457 plan has had on watch for performance since March.
Janus spokesman Shelley Peterson was not available for comment at press time. Turner spokesman Tucker Hewes declined to comment.
Police fund adds to portfolios
The $1.5 billion Louisiana Municipal Police Employees Retirement System will increase its allocation to active international value equity manager KBC Asset Management International to $50 million from $25 million. Funding comes from reducing active domestic large-cap equity portfolios managed by AllianceBernstein, SKBA Capital Management and INTECH. No managers were terminated, said Kathy Bourque, director.
Fees confuse participants
Most 401(k) plan participants 83% do not know how much they pay in fees associated with their plan, according to an AARP survey. In addition, 54% said they dont feel knowledgeable about the effect fees can have on their retirement savings. AARP executives urge participants to consider no-load mutual funds and index funds, according to a report accompanying the survey results.
Separately, David Certner, legislative counsel and policy director for AARP, asked the Employee Benefits Security Administration to draft regulations requiring plan administrators to provide comprehensive disclosures on plan investments, fees and expenses to all 401(k) participants.
Bannon out at BNY Mellon
Kevin Bannon, CIO of the Bank of New York, has left as result of the companys merger with Mellon Financial, a deal that formally closed early last month. Mr. Bannons position was eliminated when the management structure of the new company was put in place, confirmed a BNY Mellon spokesman. The CIO responsibilities in the new company are now being carried at the line of business level, said Ron Sommer, spokesman. Mr. Bannon was also the chairman of the Bank of New Yorks investment policy committee, head of private client asset management at the bank and head of BNY Hamilton Funds.
Mr. Bannon did not return a call seeking further information.
Putnam a done deal
Putnam Investments sale by Marsh and McLennan to Great-West Lifeco, a subsidiary of Power Financial Corp., was completed Aug. 3, said Nancy Fisher, Putnam spokeswoman. In a news release, MMC said it sold the money management firm for $3.9 billion in cash, and netted $2.5 billion after accounting for taxes and minority interests. As of June 30, Putnam had $193 billion in assets under management.