School may hike hedge funds

Officials at the $675 million Texas Tech University endowment are considering boosting the fund's 25% allocation to hedge funds, said CIO Gary Ratliff. School policy limits the maximum exposure to 30% of total assets.

Mr. Ratliff said any increase would come from trimming the endowment's $140 million domestic equity portfolio or from the endowment's $55 million cash allocation.

“It's a possibility for us, but nothing definitive has been decided,” Mr. Ratliff said. “If we find the right opportunity, then maybe.”

The $38.4 billion Illinois Teachers' Retirement System terminated Evercore Asset Management from its emerging managers program for performance.

The $15.5 million managed by Evercore in active domestic smidcap value equities was transferred to an existing S&P 500 index fund managed by RhumbLine Advisors. It will be reallocated to the system's $500 million emerging managers investment program, said Eva Goltermann, public information officer. About $195 million of the $500 million emerging manager set-aside has been committed.

Andrew Moloff, Evercore's CIO, did not return a call by press time seeking comment.

The decision to terminate Evercore was made Aug. 7, and the portfolio was liquidated in the ensuing weeks.

Some 37% of global pension plan executives are using liability-driven investing strategies, up from 20% a year ago, a survey by SEI Investments shows.

Also, 26% said they were not considering an LDI approach in 2008, down from 33% last year, according to a report accompanying the survey.

Among those using LDI, 79% said it was employed to control year-to-year volatility of funded status, unchanged from 2007, and 45% used it to control contribution and/or pension expense, down from 46% in 2007.

SEI surveyed 160 executives overseeing pension plans ranging from $30 million to more than $5 billion in assets in the U.S., U.K., Canada, Hong Kong and the Netherlands. The survey was conducted in July and August.

The Financial Accounting Standards Board gave a ringing endorsement to an SEC proposal that could lead to the use of international financial reporting standards by U.S. issuers of securities starting in 2014.

“By setting a proposed road map, the SEC has provided forward momentum to the goal of setting high-quality accounting standards both in the U.S. and internationally, and we've been strongly committed to this goal since 2002,” FASB spokesman Neal McGarity said in an interview.

Mr. McGarity declined to comment on what might happen to the FASB if the SEC proposal becomes reality.

Under the SEC proposal, announced Aug. 27, the agency would decide in 2011 whether adoption of IFRS would be “in the public interest and would benefit investors,” according to a statement on the SEC's website.

More than 300 defined contribution plans administered by Vanguard used automatic enrollment in 2007, three times as many as in 2005, according to a Vanguard report.

The plans with auto enrollment, typically sponsored by larger companies, now account for 15% of all Vanguard-administered plans and one-third of all participants in Vanguard-client plans, according to a news release.

Also, among the plans with automatic enrollment, two-thirds now feature automatic annual increases in savings rates, up from one-third in 2005.

The report is based on analysis of 3 million DC participants in more than 2,200 plans administered by Vanguard.

Roger Yates, CEO of Henderson Group, will leave in November, confirmed spokesman Richard Acworth. Andrew Formica, head of equities, will replace him.

Mark C. Lapman will retire as CEO and chairman of Independence Investments when his replacement is announced. Spencer Stuart is conducting the search. Jay C. Leu, a senior vice president and senior portfolio manager, replaced Mr. Lapman as chairman of the company's investment committee.

Participants in 403(b) retirement plans contribute less and are not as aggressive with their investments as their 401(k) counterparts, according to a Spectrem Group survey.

The survey showed 38% of 403(b) participants defer 6% or more of their earnings into their retirement plans compared with 48% of 401(k) participants. In addition, the proportion of 403(b) participants eligible to make catch-up contributions is half that of 401(k) participants.

Also, 52% of 403(b) participants describe their investment strategy as very or somewhat conservative, compared with 43% of 401(k) participants.

Those enrolled in 403(b) plans are twice as likely as those in the 401(k) group to receive no employer contributions at all, the survey showed.

And while 74% of 401(k) participants receive an employer match, only 57% of 403(b) participants receive one.

Partha Dasgupta said he will step down as CEO of the U.K.'s Pension Protection Fund when his contract expires in June 2009.

He has been at the PPF, Britain's equivalent of the PBGC, since it was created in 2005. He was first named director of investment and finance, and was then appointed CEO in June 2006.

“It was the right time to do something new,” Mr. Dasgupta said in a telephone interview. “I put my heart and soul into building the organization, so it was quite a difficult decision. But I decided it was good to go out on a high.”

Mr. Dasgupta said he hasn't decided what he will do after he leaves the fund.

The board will most likely start a search for his successor in September or October, he said.