The PBGC has taken over the pension plan of Pope & Talbot, which is under Chapter 11 bankruptcy protection. The company has $57.5 million in assets and $62.3 million in liabilities, and the PBGC will cover $3.7 million of the $4.8 million shortfall, the agency said in a news release.
News briefs: P&T plan taken over by PBGC
A $115 million settlement between the $14.7 billion Louisiana Teachers Retirement System and four former American International Group Inc. executives and an AIG holding company received preliminary court approval, according to the law firm representing the teachers system.
The suit, which was filed in 2002 in Delaware Chancery Court, claimed that AIGs directors and executive officers, including former Chairman and Chief Executive Maurice R. Greenberg, breached their fiduciary duties by using C.V. Starr which is headed up by AIG executives for a series of self-dealing transactions, according to a release from the law firm of Grant & Eisenhofer.
According to the settlement, the group of defendants believe they have substantial defenses to the claims alleged against them and denies and continues to deny all allegations of wrongdoing and denies liability on the claims asserted in the action. The defendants will be free from any claims sought in the original lawsuit if the settlement is approved.
A hearing to approve the settlement is set for Dec. 17.
Virginia Retirement System, Richmond, allocated $250 million to the GMO Emerging Markets Fund and $200 million to the Maverick Fund, said Jeanne Chenault, spokeswoman. Both are equity funds, she said. The $45 billion system also made a €84 million ($106.2 million) commitment to Charterhouse Capital Partners IX, a private equity fund, Ms. Chenault said. Funding for the commitments came from cash, she said.
Georgia Teacher Retirement System and Georgia Employees Retirement System, both of Atlanta, have lost a combined $11 billion from June 30 through Oct. 21, confirmed Bill Cary, CIO for both funds.
The value of the teachers fund on Oct. 21 was $41.6 billion, down 17.3% from $50.3 billion on June 30, while employees system assets totaled $12.5 billion, 17.8% less than the $15.2 billion at the end of June, primarily because of the drop in the equity markets.
Neither Jeffrey Ezell, executive director of the teacher system, nor Pamela Pharris, executive director of the employee system, returned calls by press time.
Turner Investment Partners laid off 22 distribution and client-service professionals.
Turner Investment Partners has reduced its staff by approximately 15%, as part of a larger reorganization of its sales and marketing division, a spokesman for the growth equity manager said in a statement. No investment or compliance professionals are affected.
The layoffs come less than a week after the company delayed its planned IPO by withdrawing its registration statement with the SEC.
Turner becomes the latest money manager to announce planned or implemented layoffs as plunging equity markets have depressed their margins. In earnings announcements Thursday, Janus Capital Group announced that 9% of staff, all non-investment employees, would be cut, and AllianceBernstein Chairman and CEO Lewis Sanders said layoffs at his firm during the current quarter were inevitable.
Separately, the money manager, which had $26.8 billion in assets under management as of June 30, filed a request on Oct. 17 with the SEC to withdraw its registration statement, a company spokesman confirmed.
The move follows a year of tumultuous market declines since the growth equity boutiques Sept. 18, 2007, announcement that it would seek to complete an initial public offering of as much as one-third of the firms equity by the end of 2007. The Turner spokesman declined to give further details.
Chicago Policemen's Annuity & Benefit Fund will interview finalists at its Nov. 24 investment committee meeting to manage part of the $2.8 billion fund's new infrastructure allocation.
The fund's board likely will select at least one manager at its Nov. 25 meeting, said CIO Sam Kunz.
The plan added the 5% infrastructure allocation earlier this year.
Mr. Kunz said the fund's investment committee also will begin educating trustees next month about its new currency allocation. Potential manager searches and the size of possible mandates have not been determined.
Currency management is part of the fund's 10% allocation to opportunistic alternatives that was approved at the beginning of the year.
Separately, the fund hired at least one private equity fund-of-funds manager. He would not provide the size of the new mandates nor the number of money managers hired. Mr. Kunz said the board has instituted a new "quiet period" policy that forbids him from announcing managers until contracts have been signed.
Northrop Grumman Corp., Los Angeles, contributed $86 million to its $22.9 billion cash balance plan year to date through Sept. 30, according to an SEC filing.
The company is required to contribute $120 million this year to meet minimum funding levels.
Northrop Grumman also warned that "recent declines in the financial markets have impacted the market values of assets in the company's defined benefit pension plans, and these conditions could lead to significant future increases in pension costs," according to the SEC filing.
For the nine months ended Sept. 30, the plan lost $1.4 billion, compared with a loss of $1.3 billion in the first nine months of 2007.
Los Angeles Fire & Police Pension System committed $20 million to Thoma Bravo Fund IX, and €20 million ($25.4 million) to LBO France White Knight VIII, said Michael A. Perez, general manager for the $11.7 billion system.
Both are middle-market leveraged buyout funds.
Thoma Bravo IX focuses on the software and service industries with an $800 million target. Thoma Bravo was formed in 2007, following the breakup of private equity firm Thoma Bravo Cressey; the system has invested in three of the predecessor firm's earlier funds. The general partner will commit $50 million to the fund.
White Knight VIII invests in French-based multinational corporations with a €1.2 billion target. The general partner will contribute €40 million to the fund.
Aldus Equity assisted on both.
Con-way Inc. filed a lawsuit in U.S. District Court in San Francisco seeking a declaration that the company isnt liable for the $662 million in withdrawal liability sought by the $26.8 billon Central States, Southeast and Southwest Areas Pension Fund, Rosemont, Ill., according to a filing Oct. 10 to the SEC by the San Mateo, Calif.-based company.
Central States claims the withdrawal liability was incurred by Consolidated Freightways Corp., a former subsidiary of Con-way, which was spun off to stockholders in 1996, the filing states.
CFC subsequently went bankrupt in 2002 and the multiemployer pension Central States fund assessed CFC a share of the unfunded vested benefits in the pension plan.
Central States further claims the trigger date for assessing the CFC withdrawal liability was the unrelated sale by Con-way in 2004 of its Menlo Worldwide Forwarding Co. unit to United Parcel Service Inc., the filing states. Central States contends that sale resulted in Con-ways complete withdrawal from the pension fund and CFCs permanent end to its obligation to contribute to it, the filing states.
That later date raised the withdrawal liability to $662 million from $319 million, the higher amount primarily reflecting the fact that Central States overall level of underfunding increased substantially from 2002 to 2004, the filing said.
Payment of all or a significant part of the withdrawal liability claim could have a material adverse effect on Con-ways financial condition, the filing said.
Con-way, a transportation and logistics company, has a non-union workforce and has no employees in the Central States fund, said Gary Frantz, communications director.
Thomas C. Nyhan, Central States executive director, and Mark F. Angerame, CFO, were out of the office and unavailable for comment.
Assets managed through the office of Wyoming state Treasurer Joe Meyer declined less than 3% in the third quarter, according to unaudited figures posted on the treasurer offices website.
The states portfolio had $10.6 billion as of Sept. 30, down from around $10.9 billion as of June 30.
A letter posted on the website that discussed performance through Aug. 31, said the portfolio did not have significant investments in auction-rate securities, subprime markets, asset-backed and mortgage-backed securities and others whose value has recently decreased.
The letter said key reasons for the asset decline were financial uncertainty in the markets, panic buying and selling and future economic projections.
In keeping with private and public investment portfolios all over the nation, there is no place to run and no place to hide until the national financial dramas play out, Mr. Meyer wrote. He also mentioned that short-term cash holdings by the states investment managers are increasing on his authorization until financial markets clear up.
Mr. Meyer did not return a call seeking comment.
New Jersey Division of Investments assets under management fell $5.3 billion in September, a 7% decline from a month earlier, because of turmoil in global markets, which translated into a 9% decline for the first quarter of fiscal 2009.
Pension assets stood at $70.7 billion on Sept. 30, said Thomas Bell, spokesman. The division had $76 billion in pension assets at the end of August and $77.7 billion on June 30, the end of the fiscal year.
In its August report, the division said that estimated performance for the pension funds for the fiscal year-to-date period through Aug. 31, 2008 is -0.94% vs. -2.21% for the benchmark.
As of Sept. 30, New Jersey pension funds had $21.3 billion in U.S. equity and $13.8 billion in foreign equities, $19.7 billion in U.S. fixed income, $10.2 billion in alternative investments as well as $4.3 billion in cash and $1.4 billion in other investments, described as police and fire mortgages.
Florida State Board of Administration is now disclosing all its proxy votes online, including those made in advance of corporate meetings, according to a statement from the board, which oversees $154 billion.
Because voting is ahead of the meeting, wed like other stakeholders to be aware of our decision, Michael P. McCauley, the boards senior corporate governance officer, said in an interview.
The votes are disclosed almost in real time as they are made, typically 10 days prior to the company meeting, Mr. McCauley said in the interview.
The SBA expects this leadership in the disclosure of its voting will assist other investor groups challenged with fewer governance resources and enable them to make more informed voting decisions, the statement said.
Florida SBAs proxy-voting database, at http://www.sbafla.com/corpgov.aspx, is fully searchable based on date, calendar range, company name and SBA portfolio, including by investment manager, the statement said.
The disclosure is for all U.S. publicly traded companies, in internally and externally managed portfolios and in passive and active investments, Mr. McCauley said. It also includes some international equity proxies for which FSBA retains voting authority, although most of its international equity proxy-voting is at the discretion of its investment managers and is not disclosed, Mr. McCauley said.
The board is reviewing how to improve its coverage of global governance issues, including proxy voting, he added.
Florida SBA, which oversees the $126.9 billion Florida Retirement System, Tallahassee, cast proxy votes for 3,534 public companies, covering more than 30,373 individual proxy voting issues, in the 12 months ended June 30, the statement said.
The 100 largest U.S. corporate plans took a $9 billion hit to their balance sheets in September, with an 83-basis-point increase in the monthly discount rate not enough to offset a $78 billion loss tied to volatile equity markets, according to data from consulting and actuarial firm Milliman.
It should come as no surprise that pensions suffered during the sharp market downturn in September, John Ehrhardt, Milliman director, said in a news release. Fortunately these losses were offset by gains in interest rates.
We cannot predict where the market will close at the end of October, though (the) worldwide reduction in interest rates seems to indicate that we may not have such an offset in October, he said in the release.
The funded ratio of these plans dropped to 98.4% at the end of September, from 104.9% at the start of the year.
The corporate plans that were measured are in the Milliman 100 Pension Funding Index.
Corporate plans had a median return of -8.8% in the third quarter and -15.5% for the 12 months ended Sept. 30, while public funds returned -9% for the quarter and -14.8%, and foundation and endowments returned -8.5% and -13,2% respectively, according to Northern Trust.
The overall -8.8% median third-quarter performance of the Northern Trust universe more than 300 plans with a total value of $660 billion made it four consecutive quarters of decline, according to a news release by Northern Trust.
In addition to extreme market volatility, plans in all segments were hampered by the underperformance of fixed-income programs, William Friske, a performance consultant for Northern Trust Investment Risk & Analytical Services, said in a statement in the news release. The median return for total fixed-income programs in the Northern Trust Universe was -2.8% in the third quarter, compared to a -0.5% for the Lehman Aggregate Bond index.
Mr. Friske said in the release that credit exposure and duration caused the underperformance in fixed income. As a result, corporate pension plans lagged their assigned performance benchmarks by the widest margin in at least a decade, he said.
At least two major Dutch pension funds fell below the required 125% government funding threshold because of the global market turmoil, according to financial statements from the funds.
A third fund, Pensioenfonds Zorg en Welzijn, Zeist, remains above the limit, according to its third-quarter results.
Assets at the Stichting Pensioenfonds ABP, Heerlen, fell 5% to €195 billion ($250 billion) in the quarter ended Sept. 30, from €205 billion the previous quarter. Its funding ratio fell to 118%, from 132% at the end of June.
Pensioenfonds van de Metalektro, Zuidoost, also fell below the mark with a ratio of 112% at the end of September, down from 127% three months earlier. Assets fell 4.1% to €20.5 billion during the period.
PFZW, formerly known as PGGM, logged a 5.5% loss during the quarter, resulting in a decline in assets under management to €81.9 billion. However, the funding ratio remained above the limit, at 126%.
Under Dutch law, funds that fall below the 125% level are required to submit a plan to recover within a period of 15 years. ABP will submit its plan by the end of this year, according to the statement from the fund.
The funds long-term investment strategy is not likely to change as result of the shortfall, said Thijs Steger, spokesman for APG Groep, Heerlen, which manages assets for ABP.
PME spokeswoman Gerda Smits could not be reached for comment by press time.
Companies in the S&P 500 could face their largest pension deficit ever because of this years financial crisis, according to a new report.
At the end of 2007, S&P 500 companies pension plans were overfunded by $63 billion the highest since 1995, according to the report by S&P analyst Howard Silverblatt. Companies predicted an 8% return on assets in 2008, but any pension fund manager that is even breaking even this year is most likely demanding a bonus, he wrote.
Pension funds of S&P 500 companies have 61% in equity, 28% in fixed income, 4% in real estate and 7% in other investments.
The U.S. market is down over a third, and thats good compared to the emerging markets that are down over half this year alone so that 61% in equity may not be doing that well, Mr. Silverblatt said in the report. When you calculate it all out at the current market returns, or even assuming a nice Q4 rebound, you get a number that is worse than the $219 billion in underfunding reported in 2002.
He said the solution to the problem is large unplanned cash infusions.
Mr. Silverblatt predicts that few companies will remain overfunded, which will result in more disappearing defined benefit plans.
CalPERS has lost more than 20% in assets since July 1, said Clark McKinley, spokesman for the $197.6 billion system.
The California Public Employees Retirement System, Sacramento, was 92% funded as of June 30, down from 102% a year earlier.
The systems investment return was about -2.5% for the year ended June 30, 10 percentage points less than its actuarially assumed investment return of 7.75%, according to a staff report to CalPERS benefits and program administration committee. This will reduce the funded status of all plans by about 10%, the report stated.
Such decline will no doubt have an impact on the funded status of plans at CalPERS and on the contribution rates that employers will have to pay in the future, stated the report, which was on the impact of the market downturn on employer contribution rates.
Because of smoothing, employer contributions will not increase in the current fiscal year, but if declines continue at the rate of 20%, those contributions could increase to 4% from 2% for some of the systems plans starting July 1, 2010, and the rest of the plans on July 1, 2011, the report stated.
A total of 32 private equity real estate funds raised $30.8 billion in the third quarter, compared with $27.8 billion raised by 45 funds a year earlier, according to Private Equity Intelligence data. During the second quarter of 2008, 41 funds raised $32.4 billion.
The two largest funds to close in the third quarter were the Lone Star Fund IV, which closed at $7.5 billion, and LaSalle Asia Opportunity Fund III, at $3 billion, according to the data.
Currently, there are 378 real estate funds in the market seeking a total of $243 billion, up from 273 funds raising $127 billion in January.
Growth in infrastructure and technology to mitigate climate change is projected to reach $650 billion in the next 20 years, from the $148.4 billion in new investment in 2007, according to a DB Advisors research report on the climate-change investment universe.
The debate around climate change is shifting away from cost and risk toward the question of how to capitalize on potential investment opportunities, said a DeAM statement about the report, Investing in Climate Change 2009: Necessity and Opportunity in Turbulent Times. It was authored by DB Advisors global climate change investment research team.
The climate change universe is well suited for public equity markets, private markets such as venture capital, private equity, infrastructure and timberland, the report said.
The current financial crisis is making the necessity of tackling climate change an opportunity to stimulate growth through investment opportunities, Mark Fulton, DeAM global head of climate change investment research, said in the report. Investing in energy efficiency technologies and other climate change mitigation efforts are obviously highly desirable in economies facing recession.
Kevin Parker, global head of asset management and a member of the Deutsche Bank group executive committee, said in the report, Investment opportunities in climate change were driven by long-term megatrends that would continue into the foreseeable future the absolute necessity to act now to mitigate and adapt to climate change is even more urgent, and the opportunities generated by the sector continue to increase.
The tipping point stands no more than 15 to 20 years away, Mr. Parker said in the report, explaining the average global temperatures are likely to rise by 2 degrees Celsius or more without significant and immediate action, or some unforeseen miracle.
Pension plan executives surveyed by Pyramis Global Advisors expressed widespread support for continuing to offer defined benefit plans to their employees.
The survey, conducted in June, showed more than half of both corporate and public DB plan executives philosophically committed to the concept of a DB plan, with most of the remaining respondents citing other factors – such as their merits as a recruitment or retention tool – for favoring DB.
The survey found 33% of corporate executives most concerned about market volatility, with worries about funding volatility a close second. Public plan executives cited the low-return environment in capital markets as their top concern.
Pyramis latest annual survey found a significant portion of true believers in DB plans, in contrast to previous periods of uncertainty when more plan sponsors were on the fence. Also, plan executives inclined to freeze or close DB plans had already done so, Patrick J. McNelis, executive vice president of global distribution and client service, said in a news release.
The survey showed 83% of 126 corporate DB plans and 98% of the 122 public DB plans already have made the decision whether to freeze their DB plans.
Corporate plans reported they had decreased their U.S. equity allocations by an average of 600 basis points while increasing their fixed-income allocations by 400 basis points, reflecting growing adoptions of LDI strategies 36% had adopted LDI programs, more than double the previous years survey.
Public plans dropped their U.S. equity allocations roughly the same amount as corporate plans, while putting more money into non-U.S. equities and alternatives.
Board members of U.S. financial services companies say they could do more to aid market stability by providing greater transparency to risk, more clarity on balance sheet reports and more robust valuation tools, according to a PricewaterhouseCoopers survey.
In the survey of more than 300 board members, conducted Sept. 22-Oct. 4, 95% believe balance sheet reports need greater clarity, 77% said valuation tools now are not robust enough, 65% believe corporate boards lack the tools needed to adequately assess risk, 88% said risk management does not do enough to account for exposure to off-balance-sheet entities; and 96% want financial institutions to publicly disclose information concerning such risks.
As we continue to navigate these unpredictable market conditions, audit committees, now more than ever, need to have access to the information and tools necessary to do their jobs effectively, James F. Flanagan, leader of PwCs U.S. financial services industry practice, said in written statement.
The complete survey results can be found at http://www.pwc.com.
U.S. Bankruptcy Court Judge James Peck on Oct. 16 approved bidding procedures for Lehman Brothers Holdings Inc. to sell Neuberger Berman Investment Management in a bankruptcy auction, confirmed Neuberger spokesman Randall Whitestone.
Mr. Whitestone declined further comment.
The decision clears the way for the Lehmans investment management division which includes Neuberger to be acquired by private equity firms Bain Capital Partners and Hellman & Friedman. The firms announced Sept. 29 a proposal to buy the unit for $2.15 billion and form a new asset management company.
Private equity firm Carlyle Group and former Neuberger CEO Jeffrey Lane on Oct. 14 filed an objection to the Bain/Hellman bid in U.S. Bankruptcy Court in New York.
Lehman Brothers was forced into Chapter 11 bankruptcy protection on Sept. 15, the largest bankruptcy filing in U.S. history.
AMR Corp., Fort Worth, Texas, reported a $432 million gain from its sale of its American Beacon Advisors Inc. asset management unit, according to a quarterly financial report filed with the SEC.
The sale was chiefly responsible for AMR, parent of American Airlines Inc., recording a net profit of $45 million in the three months ended Sept. 30.
Without the sale or other special items, AMR had a loss of $360 million for the period.
AMR last month completed the sale of American Beacon for $480 million to Lighthouse Holdings Inc., which is owned by investment funds connected with private equity firms Pharos Capital Group and TPG Capital. AMR retained a 10% equity interest in American Beacon, said Blake Zipoy, manager of marketing and client relationships at American Beacon.
American Beacon had $57 billion under management as of Aug. 31, according to an AMR statement.
American Beacon continues to provide investment advisory services for American Airlines $9.1 billion pension fund, $7.3 billion 401(k) plan and other employee benefit funds, as well as cash management for AMR.
William F. Quinn, who remains chairman of American Beacon, retired as vice president of AMR in September. Mr. Quinn was out of the office and unavailable for comment.
Goldman Sachs analysts cut their earnings-per-share estimates for 15 asset management firms by 26% and their price targets by 25%.
However, only one managers rating was downgraded by analysts. Affiliated Managers Groups rating was downgraded to neutral from buy. Although we continue to think AMG is uniquely positioned to capture share via acquisitions, market volatility poses challenges to pursue deals, while many of the firms existing affiliates are facing headwinds, according to a note to clients by analysts Mark Irizarry and Alexander Blostein. AMG spokeswoman Brett Perryman declined to comment.
The analysts also upgraded Invescos rating to buy from neutral. Invesco is one of the best diversified asset managers in the space, with balanced exposure throughout asset classes, distribution channels and geographies. We believe this combination will allow (Invesco) to weather the current market turmoil, according to the report.
In light of unprecedented volatility and global market deterioration, the group is expected to start 2009 with (assets under management) down 15% year over year, which will clearly weigh on earnings, Mr. Irizarry wrote. In addition, the rapid pace of (assets under management deterioration leaves little time for the group to reposition resources, which could lead to a cumulative 08/09 operating margin decline of 250 (basis points) on average akin to the 2001 recession.
Messrs. Irizarry and Blostein believe flows could remain negative for another year after the market bottoms, similar to what happened with flows after the 1987 crash.
Nearly 70% of fund managers believe the global economy has entered into a recession, up from 44% one month ago, according to Merrill Lynchs October global managers survey.
Also, a new high of 59% believe that monetary policy is too restrictive, a record 49% are overweight in cash and 43% a 10-year high believe equities are undervalued.
Fund managers are waiting for the triggers that will give them the confidence to buy, Gary Baker, head of Europe, the Middle East and Africa equity strategy at Merrill Lynch, said in a news release. What they are looking for is a loosening of monetary conditions and for third-quarter earnings to clarify where problems and opportunities lie across equity markets.
Managers are particularly pessimistic about Europe, according to the survey, with 41% underweight in eurozone equities.
The 172 fund managers who participated in the survey, conducted Oct. 3-9, manage a total of $531 billion.
More than 60% of the firms used by manager-of-managers Northern Trust Global Advisors said the S&P 500 was undervalued at the end of September, with some of the best opportunities seen in health care, technology and energy.
In its previous survey at the end of June, 46% of the managers said the S&P 500 was undervalued, according to a news release from NTGA.
The latest survey of about 75 managers also showed 54% expect global inflation to decrease, a reversal from the earlier survey, where 85% forecast an increase in inflation. Amid the latest market turmoil, however, 86% of respondents predicted corporate earnings will decrease over the next three months, with global growth continuing to decelerate.
CFA Institute members globally support by a 3-to-1 margin worldwide government intervention to directly invest in the equity of banks, according to the results of a poll distributed to the 98,000 members of the association of investment professionals.
Seventy-five percent, or 3,174 members, favored government taking equity stakes in banks, while 25% or 1,082 members, oppose the model, said a CFA Institute statement about the surveys results.
Some 51% believe the market absolutely cannot sort out the credit market freeze without government intervention, while only 6% completely agree that the market alone can open up the credit market. The rest of the respondents were in the middle, although decidedly tilting toward government intervention.
Some 25% believe full disclosure of bank assets, asset valuations and valuation assumptions would help free up the credit markets, while 33% somewhat believe full disclosure would do so. Some 5% believe full disclosure would not, while 15% somewhat believe it would not and 23% were neutral on the question.
Among other questions, 83% believe government guarantee of all short-term debts of solvent financial institutions would restore confidence needed for institutions to resume trading with each other, while 17% or 660 respondents believe it would not restore confidence.
Calamos Asset Managements assets under management as of Sept. 30 totaled $33.3 billion, 15% below the previous month and 29% less than a year earlier, confirmed spokesman Christine Jacobs. She declined further comment.
Calamos mutual fund assets were $24.8 billion as of Sept. 30, a 15.3% decline from August and 31% below a September 2007, according to a news release. Separate-account assets of $8.5 billion in September were 15% less than the previous month and 23% below a year ago.
Marshall & Ilsley Corp. acquired a majority equity stake in fixed-income manager Taplin, Canida & Habacht, M&I spokeswoman Sara Schmitz confirmed. The transaction is expected to be completed later this quarter, subject to regulatory approvals.
Terms of the deal or the size of the stake could not be immediately learned.
Taplin, Canida principals Tere Alvarez Canida, Alan Habacht and William Canida will retain minority ownership.
Deutsche Bank Securities advised Marshall & Ilsley on the deal and the law firm of White & Case advised Taplin, Canida.
As of Sept. 30, Marshall & Ilsley Investment has $25.5 billion in assets under management and Taplin, Canida had $7.5 billion in assets under management.
Insurance companies placed almost $990 billion of assets with third-party managers, a 9.8% increase from 2006, according to a survey by financial services consultant Patpatia & Associates.
Fifty-eight percent of insurers that were surveyed outsourced at least a portion of their business. Industrywide, roughly 14.4% of insurance assets are run by third-party managers, according to the survey.
Outsourcing business has historically come from property and casualty insurers, rather than life insurers, because of the highly customized, book income investment approaches that life insurance liabilities require, the survey shows. However, this has expanded over the past several years as there are a greater number of insurance specialists with the capabilities to support (asset-liability management)-sensitive strategies, according to the survey.
For the asset management industry it means you have to be more market focused instead of having a product and saying, Let me have people buy it, said Sunny Patpatia, president.
The survey evaluated 49 asset managers and more than 350 U.S. insurance companies with more than $500 million in assets.
Patpatia & Associates is consultant to the investment management, insurance and wealth management industries.
RS Investments changed the name of its $781 million RS Core Equity Fund to RS Large Cap Alpha Fund.
The fund focuses on large-cap companies. Portfolio manager Manind Govil and his team will continue to manage the fund. The fund became part of the RS Investments product lineup after the 2006 merger with Guardian Investor Services. It originally was the Guardian Park Avenue Fund.
We remain deeply committed to serving our clients and Nuveen with focused and customized investment solutions, and believe this name change better reflects that commitment, Thomas M. Richards, co-founder and principal of Richards & Tierney, said in the release. Our professional staff and analytical resources continue to grow. We look forward to developing a variety of new and specialized investment solutions to help meet our clients long-term investment goals.
Nuveen Investments managed a total of $152 billion in assets as of June 30.