Illinois Teachers hires Loomis to run $675 million

The $38.7 billion Illinois Teachers’ Retirement System hired Loomis Sayles to manage $675 million in long-duration global fixed income. Trustees also promoted fixed-income manager Dolan McEniry Capital Management from the fund’s emerging manager program, increasing the core domestic portfolio to $170 million from $28.5 million. Funding for both will come from the system’s other fixed-income managers.

Separately, the board on May 22 hired its first active international small-cap equity managers: American Century for $140 million in growth and Dimensional Fund Advisors, $200 million in value. Funding will come from rebalancing other international equity managers. The system also committed e25 million ($39 million) to Avenue Europe Special Situations Fund, a private equity fund that will invest in distressed situations, with funding coming from cash and passive/enhanced index accounts.

Trustees doubled the system’s allocation to passive U.S. large-cap equities to 8% of total assets, to be distributed to existing managers in that asset class. U.S. enhanced index equity was cut to 21% from 25%.

The PBGC transferred about $173 million to two Delphi pension plans after cashing in letters of credit the agency had received from the company, confirmed Jeffrey Speicher, PBGC spokesman. The U.S. Hourly Pension Plan received $122.5 million and the U.S. Salaried Pension Plan received $50 million. Delphi’s defined benefit plan assets were estimated to be $15 billion as of Sept. 30.

The company had given the PBGC the letters of credit when it received waivers from meeting its pension funding obligations. Delphi on May 9 reiterated its intention to freeze its U.S. hourly and salaried plans when it emerges from Chapter 11 bankruptcy protection.

Crain Communications added the American Century Inflation-Adjusted Bond fund and the Baron Small Cap Growth fund as investment options in its combined $90 million profit-sharing and voluntary savings plans, said William Morrow, executive vice president. The funds replace the Fidelity Advisor Inflation-Protected Bond Fund and the William Blair Small Cap Growth Fund. The two plans offer the same 13 core investment options and five target-date funds. Crain owns Pensions & Investments.

Norway’s 1.95 trillion kroner ($391 billion) Government Pension Fund-Global lost 5.63%, or 114.8 billion kroner, in the first quarter because of investment losses, according to the website of fund manager Norges Bank Investment Management. The fund also lost an additional 2.3%, or 46.1 billion kroner, because of changes in currency values. Equity investments returned -12.67%, while fixed-income investments returned 0.87%, in the period. For the year ended March 31, the fund’s assets rose 3.71%.

The $7 billion Arizona Public Safety Personnel Retirement System committed $125 million to the Apollo European Principal Finance fund, a distressed debt fund, said James Hacking, administrator.

The median corporate pension plan in the Mellon Analytical Solutions universe returned -5.5% in the first quarter, while the median public plan returned -5.1% and the median foundation and endowment, -5%, according to a new Mercer report.

Core fixed-income managers reported the best performance in the quarter, with a median 1.5% return vs. 2.2% for the Lehman Brothers Aggregate Bond index.

Small-cap growth managers reported the worst performance, with a median -14.5% return in the period vs. -12.8% for the Russell 2000 Growth index.

Median large-cap core, large-cap value and large-cap growth equity managers reported losing 9.6%, 8.8% and 10.9% respectively, all trailing their respective benchmarks. The median international equity manager matched its MSCI EAFE benchmark, which was -8.9% for the quarter.

Nineteen institutional investors — including CalPERS, CalSTRS, New York State Common Retirement Fund, the New York City Retirement Systems and the Connecticut Retirement Plans and Trust Funds — endorsed shareholder proposals at Exxon Mobil calling for a split in the chairman and CEO positions and action to address climate change risks and opportunities.

“Exxon Mobil’s go-slow approach in addressing greenhouse gas reductions and investments in renewable energy sources places long-term shareholder value at risk,” California State Treasurer Bill Lockyer, who serves on CalPERS and CalSTRs, said at a teleconference. “Instead of dragging its feet, Exxon Mobil should be taking the lead in providing long-term climate solutions.”

Kenneth Sylvester, assistant comptroller-pension policy at the New York City comptroller’s office, which oversees the city’s retirement system, added that if the company ignores majority or large votes in favor of the proposals, investors might step up shareholder activity, including withholding votes from directors.

The company’s annual meeting is May 28. Exxon Mobil media representatives didn’t respond to a call for comment.

Participants in 401(k) plans transferred $98 million to equity funds from fixed-income investments in April, according to the Hewitt 401(k) Index. During April, large-cap U.S. equity funds received positive net inflows of $7 million. Company stock experienced the greatest outflow among asset classes, at more than $315 million. Outflows of balanced funds totaled $217 million.

Stable value funds had the highest net inflows in April at $230 million.