Harvard execs net $23.3 mil
Harvard Management announced its six highest-paid employees earned a combined $23.3 million in compensation for managing Harvard Universitys endowment fund to a 23% gain, to $34.9 billion, for the fiscal year ended June 30. Former HMC President and CEO Mohamed El-Erian, who left Dec. 7 to rejoin PIMCO, led the pack with salary, bonuses and benefits totaling $6.5 million, followed by Andrew Wiltshire, managing director, natural resources, with $6 million; Craig Szeman, managing director, domestic equities, $3.4 million; Steven Alperin, managing director, emerging market equities, $2.8 million; David Ferrero, senior vice president, real estate, $2.5 million; and Marc Seidner, managing director, domestic fixed income, $2.1 million.
Bear Stearns assets shrink
Bear Stearns reported $44.6 billion in assets under management in its fourth quarter ended Nov. 30, down 22.8% from the previous quarter and 15% below the fourth quarter of 2006. The drop stems largely from transferring about $8 billion in assets to OShaughnessy Asset Management, a new firm created by former Bear Stearns equity manager James OShaughnessy.
Net revenue from asset management dropped 32% for the fiscal year to $228 million; write-offs and lower management fees related to hedge funds drove the decline. Fourth-quarter revenue totaled $111 million, down from $113 million in fourth quarter of 2006.
L.A. fund commits to 4
The $16.7 billion Los Angeles Fire & Police Pension System will commit $25 million each to Natural Gas Partners IX and Huff Energy; $10 million to Halyard Capital Fund II; and $5 million to Longitude Venture Partners, said Michael Perez, general manager. Private equity consulting firms StepStone and Aldus Equity assisted. The system has $1.2 billion committed to private equity, and system officials plan to commit another $450 million each year to reach a total of $2.4 billion.
Fairfax Co. adds global alpha
The $2.8 billion Fairfax County (Va.) Employees Retirement System hired BGI to run $60 million in a fixed-income global alpha strategy, said Laurnz Swartz, executive director of the Fairfax County Retirement Administration Agency, which manages the fund. Funding comes from terminating a core fixed-income portfolio managed by JPMorgan. The move was part of system restructuring away from core bonds.
Janus closes 3 funds
Janus Capital Group announced it has closed to new investors the $10.9 billion Janus Overseas Fund, the $3 billion Janus Aspen International Growth Portfolio and the $2.3 billion Janus Adviser International Growth Fund. Janus officials close funds to new investors prior to the funds reaching full capacity in order to allow them to grow without sacrificing returns, said Shelley Peterson, spokeswoman.
Virginia invests $45 million
The $60 billion Virginia Retirement System committed $45 million to AG Private Equity Partners IV, said Jeanne Chenault, spokeswoman. Funding comes from cash.
N. Mexico adds to funds
The $15 billion New Mexico State Investment Council committed an additional $30 million to the New Mexico Co-Investment Partnership, managed by Sun Mountain Capital, for a total commitment of $90 million, said Charles Wollmann, spokesman. The council also approved commitments of $25 million each to Ares Distressed Fund and Carpenter Community Bank Fund, and $15 million to vSpring III.
Cherkasky out at MMC
Michael G. Cherkasky is stepping down as CEO and president of Marsh & McLennan Cos. parent of consultant Mercer, according to a news release. A search for his replacement is under way; Mr. Cherkasky will remain with the firm while the search is being conducted.
House OKs Sudan bill
The House of Representatives approved legislation that would clear the way for pension and mutual funds to divest holdings in key companies doing business in Sudan without having to worry about fiduciary lawsuits. According to a House summary, the bill authorizes divestment from companies involved in Sudans military, power production, petroleum and mining-related industries, leaving it up to a fund to determine, using credible, publicly available information that the company is involved in one of the targeted enterprises. The legislation, which was previously approved by the Senate, now goes to President Bush for his signature; published reports indicated that the president will sign the bill.
Man USA has new CEO
Uwe Eberle was named CEO and president of Man Investments USA, effective Jan. 1. Eberle replaces CEO John Kelly, who will retire, according to a news release. The presidents position is new. Mr. Eberle was CEO of Mans U.S. institutional business and will add the firms private client business in the U.S. to his existing responsibilities. He will oversee sales and marketing, business development and client relationship management. Mr. Kelly will act as a consultant to the firm after he retires.
Hartford buys record keeper
Hartford Financial Services Group agreed to acquire defined contribution record keeper Princeton Retirement Group from parent company Merrill Lynch, said Tim Benedict, spokesman for Hartford. The deal is expected to close in the first quarter; terms were not disclosed. The acquisition adds $7 billion in assets under administration from 720 DC plans representing 170,000 plan participants to Hartfords $46 billion in assets under management and administration. Princetons 200 employees will be offered positions with Hartford.
SEI urges discount rate boost
Corporations should consider increasing the discount rates they use in calculating pension liabilities by 25 to 50 basis points at years end, a new SEI report said. The recommendation is based on analysis of changes in bond yields for the first 11 months of 2007.
The study of more than 900 pension plan sponsors also shows that half of the companies used a discount rate of between 5.75% and 6% in 2006, and half of those plan sponsors assumed a return on assets of 7.99% to 8.5% in 2006.
U.K. funds boost hedge funds
U.K. pension funds decreased their equity allocations and increased hedge fund allocations this year, according to a survey by Baring Asset Management. Overall equity allocations dropped to 63.9% this year, down from 70.8% in 2006.
Some 47.8% of respondents invest in single-strategy hedge funds or funds of funds, a dramatic rise from 17% in 2006. Still, hedge funds account for only 3.7% of fund assets, up from 3.4% last year.