Andrew Lo sells firm
Natixis Global Asset Management will acquire AlphaSimplex Group, the investment management firm founded and run by Massachusetts Institute of Technology professor and behavioral finance pioneer Andrew W. Lo.
Terms werent disclosed.
In an interview, Mr. Lo said the strategic relationship with Natixis will allow AlphaSimplex, which has grown to $500 million in assets since 1999 with no marketing or distribution staff, to implement a number of investment ideas on as broad a platform as possible. Mr. Lo will remain chairman and chief scientific officer of AlphaSimplex.
LACERA changes strategy
The $40.1 billion Los Angeles County Employees Retirement Association adopted a one-year investment plan for its $4.2 billion real estate portfolio, said John McClelland, principal investment officer, real estate.
Core property investments dropped to 67% of the portfolio, from 73%. As core properties are sold, assets will be invested in non-core properties. Some $750 million in sales are expected during the funds fiscal year ended June 30, Mr. McClelland said.
LACERA also will commit $400 million to international real estate through commingled funds investing in Europe and Asia. No RFP is being considered; real estate consultant Townsend will assist staff in finding investment opportunities.
The fund will also commit an additional $600 million to its $3.8 billion real estate separate account portfolio, to be managed by the funds six separate account managers: RREEF; TA Associates; Cornerstone; INVESCO; Emmes; and Capri Capital Advisors.
Separately, the fund committed up to $25 million in Carlyle Europe Real Estate Partners III.
Lynch leaving Wilshire
Thomas K. Lynch, senior managing director, private equity, at Wilshire Associates, is leaving at the end of the year for personal reasons, confirmed Kim Shepherd, Wilshire spokeswoman. Other members of the private equity group will assume Mr. Lynchs duties, she said. Mr. Lynch could not be reached by press time.
Annuity protection proposed
The Department of Labor proposed a new rule that would give employers that sponsor defined contribution plans safe-harbor protection when theyre selecting annuity distributions for individual accounts such as 401(k) plans, according to an announcement that was published Sept. 12 in the Federal Register.
An employer would qualify if it selects annuity providers prudently, considers engaging an expert to assist in the selection, and appropriately concludes that, at the time of selection, the annuity provider is financially able to make all future payments under the annuity contract and the cost of the annuity contract is reasonable in relation to the benefits and services to be provided under the contract, according to the proposed rule. Written comments are due Nov. 13.
Its trying to make plan sponsors feel more comfortable offering annuities, said Bill Sweetnam, a partner at the Groom Law Group and former benefits tax counsel in the Treasury Department. I think its good policy.
PennSERS adds to alts
The $34 billion Pennsylvania State Employees Retirement System will invest up to $231 million in alternative investment funds.
It committed up to $50 million to Starwood Global Opportunity Fund VIII and up to $20 million to Segulah. It also made follow-on commitments of $100 million to Bain Capital Fund X and Bain Capital Coinvestment Fund; up to $25 million each to Ignition Venture Partners IV and TPG Asia V; up to $10 million to Avenue Special Situations Fund V; and up to $1.2 million to purchase a secondary interest in Meritech Capital Partners II.
Washington urged to keep BGI
The $81 billion Washington State Investment Boards public markets committee will recommend rehiring BGI as manager of a combined $10.7 billion in Russell 2000, Russell 3000, S&P 500 and Wilshire 5000 index strategies, said Liz Mendizabal, spokeswoman for the board. The assignment could be expanded to include index-related strategies such as global, fixed-income, enhanced and customized, risk-based and target-date funds, Ms. Mendizabal said. The full board will vote on the recommendation at its Sept. 20 meeting.
Fairfax funds tap managers
The $1.1 billion Fairfax County (Va.) Uniformed Retirement System hired Advisory Research to run $60 million in small-cap value equities, said Laurnz Swartz, executive director of the Fairfax County Retirement Administration Agency, which oversees the system. Funding comes from terminating J.L. Kaplan & Associates because of management changes, Mr. Swartz said. Kaplan ran a similar style portfolio.
The system also committed $22 million to the Starboard Value and Opportunity Fund, an activist hedge fund run by Ramius Capital Group. Funding will come from reducing its BGI Alpha Tilts investment to $150 million, Mr. Swartz said. The move was part of a strategic allocation decision, he said.
In addition, the $932 million Fairfax County Police Officers Retirement System, also overseen by Mr. Swartz agency, hired ClariVest Asset Management to run $36 million in active smidcap growth equities;. AQR Capital Management, $36 million in a 130/30 small-cap core equities; and Ramius Starboard Value and Opportunity Fund, $20 million.
Funding for those allocations came from terminating two $46 million small-cap portfolios: a growth one run by Veredus Asset Management; a value one run by Systematic Financial Management. This is designed to produce better performance and to diversify, Mr. Swartz said.
Neither Karen Kohler, Systematic chief operating officer, nor Charles Mercer, a portfolio manager for Veredus, could be reached by press time for comment.
New England Pension Consultants did the invitation-only searches for the uniformed system, and Mercer did the invitation-only searches for the police system.