Bank of Ireland will likely sell its Bank of Ireland Asset Management subsidiary and its stake in a joint venture with U.S. private equity fund-of-funds manager Paul Capital Investments as part of a broader restructuring announced by the bank April 16.
BIAM had €25 billion ($33.8 billion) in assets under management as of Dec. 31, compared with about €45 billion three years earlier.
The sale would be contingent on whether the European Commission approves the restructuring plan.
In a proposal presented to the EC, bank officials are planning to sell the remainder of its asset management business, including a 50% stake in Paul Capital, which has about $6.6 billion in assets under management. The EC is expected to decide whether to accept the proposal later this year.
Kentucky sets 15% limit on external mandates
The $13 billion Kentucky Retirement Systems' external managers each will be barred from running more than 15% of the investment portfolio under a new state law signed by Gov. Steve Beshear.
The new law also requires that two of the three members appointed by the governor on the nine-member system board have at least 10 years of investment experience.
SEC sues Goldman Sachs, charges CDO fraud
Goldman Sachs Group on April 16 was sued by the SEC for fraud tied to collateralized debt obligations that contributed to the worst financial crisis since the Great Depression, according to Bloomberg.
Goldman Sachs misstated and omitted key facts about a financial product tied to subprime mortgages as the U.S. housing market was starting to falter, the SEC said in a statement. The SEC also sued Fabrice Tourre, a Goldman Sachs vice president.
The SEC alleged that Goldman, led by CEO Lloyd Blankfein, structured and marketed CDOs that hinged on the performance of subprime mortgage-backed securities. The firm failed to disclose to investors that hedge fund Paulson & Co. was betting against the CDO, known as Abacus, and influenced the selection of securities for the portfolio, the SEC said. Paulson wasn't accused of wrongdoing.
Goldman Sachs called the SEC's charges “completely unfounded in law and fact, and we will vigorously contest them and defend the firm and its reputation.” In a separate statement, the manager said it lost more than $90 million on the transaction and paid a $15 million fee. “We were subject to losses and we did not structure a portfolio that was designed to lose money,” according to the statement.
Paulson & Co. said in a statement it had no authority over the selection of assets linked to the CDO.
Obama spells out funding relief
The Obama administration has endorsed legislative efforts to provide additional funding relief to defined benefit plan sponsors, but only if the relief is targeted to companies that really need it, according to a letter to key lawmakers from Labor Secretary Hilda Solis.
The administration also wants to ensure that funding relief is not available to companies in severe financial distress that are unlikely to meet future plan funding obligations, according to the letter.
Venture cap down in Q1
Venture capital firms invested $4.7 billion in 681 deals in the first quarter, down from $5.2 billion in 832 deals in the prior quarter and the $17.8 billion invested in 635 deals this time last year, according to the MoneyTree Report from PricewaterhouseCoopers and the National Venture Capital Association.
Investment dollars in clean technology rose 87% in the first quarter to $773 million, with the number of deals increasing to 69 from 48 in the prior quarter.
The MoneyTree report is based on data provided by Thomson Reuters.
Manning to replace Pozen
Robert J. Manning, CEO and chief investment officer of MFS Investment Management, will take on the title of chairman, effective July 1, while ceding his CIO title to MFS President Michael W. Roberge.
The moves are part of a broader leadership succession plan in which Robert C. Pozen, current chairman, will become chairman emeritus, with plans to retire on Dec. 31, 2011.
Mr. Roberge's current title of CIO for U.S. investments will be eliminated. He will also become the firm's global director of research. Previously, he had shared the title of co-director of global research with David A. Antonelli.
Mr. Antonelli and Martin E. Beaulieu, head of global distribution, will become vice chairmen, effective July 1.
Landesman goes Platinum
Uri Landesman was named president and partner by hedge fund manager Platinum Partners, confirmed Jenna Boyle, Platinum's director of marketing. The position is new.
Mr. Landesman was chief equity strategist and head of global growth at ING Investment Management Americas, where he managed a total of about $3.5 billion in U.S. growth stocks and global infrastructure strategies. Joe Lopardo, an ING spokesman, did not return calls seeking information about Mr. Landesman's replacement.
Platinum manages a combined $500 million in two multistrategy hedge funds.
Connecticut investment officer resigns
David Holmgren resigned as principal investment officer with the Connecticut State Treasury, where he helped oversee the equity portions of the $23 billion Connecticut Retirement Plans and Trust Funds, confirmed Treasury spokeswoman Christine Shaw.
Mr. Holmgren left April 9, but Ms. Shaw couldn't immediately say why he left or whether he would be replaced. Mr. Holmgren couldn't immediately be reached for comment
Private equity tax hike eyed
The U.S. Senate, seeking revenue to fund jobs bills and other initiatives, is for the first time considering a House proposal that would more than double tax rates on executives at private equity firms, Sen. Charles Schumer, D-N.Y., was quoted as saying in a Bloomberg story.
The proposal, designed to raise $24.6 billion over a decade, would affect venture capitalists, managers of real estate partnerships and hedge fund managers who make long-term investments. Passed by the House three times, most recently in December as part of a jobs bill, it hasn't come to a vote in the Senate, where some Democrats have signaled they would oppose it.
Now, “it's one of the things being considered,” said Mr. Schumer, who serves on the Senate Finance Committee.
Managers of investment partnerships typically are paid 2% of fund assets as an annual management fee and 20% of the profit earned for investors above certain levels. While the management fee is taxed as income, the share of profit, known as carried interest, is treated at the capital gains rate, currently 15% and slated to rise to 20% in 2011.
The proposal would tax carried interest at ordinary income tax rates instead of the current capital gains rate.
UVA executive changes jobs
Christopher Brightman was named strategist for Research Affiliates, a new position, effective May 1.
Mr. Brightman resigned last month as CEO of University of Virginia Investment Management, which oversaw the university's $4.4 billion endowment fund. University of Virginia spokeswoman Carol Wood said a search is under way to fill the CEO position.
Lehman gets OK to split
Lehman Brothers Holdings on April 15 won a judge's approval to split into two businesses: one to manage its illiquid assets for five years and another to handle work arising from its 2008 bankruptcy, according to Bloomberg.
A unit called Lamco would run Lehman's real estate and private equity assets, while the parent company would keep 220 employees to handle claims stemming from its Chapter 11 filing, Lehman said in March.
Lehman revised the Lamco proposal after it was criticized by Goldman Sachs Group and eight other financial companies including Morgan Stanley, Credit Suisse Group and Deutsche Bank. They called it “a reorganization plan for debtors' employees and management separate, apart and ahead of the reorganization plan for creditors” in an April 5 court filing in U.S. Bankruptcy Court in New York.
U.S. Bankruptcy Court Judge James Peck approved the revised Lamco plan.