A merger of UAL and Continental Airlines would create a company with a combined $9.6 billion in retirement assets.
UAL, parent of United Air Lines, has $5.4 billion in U.S. defined contribution plans and $156 million in non-U.S. defined benefit plans, according to SEC filings.
Continental has $1.37 billion in defined benefit assets, according to SEC filings. In defined contribution assets, Continental has a combined $2.7 billion in three 401(k) plans, according to BrightScope, a firm that analyzes DC plans.
The companies have a few defined contribution managers in common: PIMCO; Dodge & Cox; Fidelity; and Vanguard. The amount each manages was unavailable.
Neither Simha Sudarshan, UAL managing director-banking, insurance and investments, nor Suzanne Hobbs, Continental director-retirement plans, could be immediately reached for comment.
Ohio fund boots manager
The $10.9 billion Ohio Police and Fire Pension Fund terminated Chicago Equity Partners, which ran $300 million in active domestic midcap core equity, because of performance, confirmed Dave Graham, fund spokesman.
The manager had been on watch since January 2008. The money will be moved to another asset class, but the specifics haven't been determined yet, Mr. Graham said.
Patrick C. Lynch, president of Chicago Equity Partners, could not be reached immediately for comment.
Fund officials also removed Western Asset Management from its watchlist, where it had been placed in April 2009. Mr. Graham said WAMCO, which manages $466 million in core fixed income, showed an improvement in investment performance.
The system also committed $25 million to Fortress Japan Opportunity Fund, a real estate fund.
Former CIO's suit dismissed
A New Mexico judge tossed out a pay-to-play lawsuit filed by Frank Foy, former chief investment officer for the $8.3 billion New Mexico Educational Retirement Board, according to Bloomberg.
In his lawsuit, Mr. Foy, who retired in 2008, sought to recoup at least $90 million in state funds lost through investments in mortgage-backed securities sold by a firm whose executives donated to New Mexico Gov. Bill Richardson's presidential campaign.
District Judge Stephen Pfeffer dismissed the case, saying in a decision April 28 that the actions at issue preceded the law under which the case was filed.
Mr. Foy claimed that as much as $243 million in state funds were used to buy “worthless” CDOs sold by Vanderbilt Capital Advisors. Mr. Foy claimed that as much as $22 million in finder's fees were shared by the son of a political ally of Mr. Richardson.
“We're very pleased with the decision,” said Peter Simmons, a partner at Fried, Frank, Harris, Shriver & Jacobson who represented the Vanderbilt units named as defendants.
Alarie Ray-Garcia, a spokeswoman for Mr. Richardson, didn't respond to a request for comment. Victor Marshall, Mr. Foy's lawyer, said the judge overlooked fraud and misrepresentation laws that predate the investments.
F&C Asset buys alternatives manager Thames River
F&C Asset Management will acquire Thames River Capital, a hedge fund and hedge fund-of-funds manager. F&C will pay £3.6 million, with an additional £20 million if Thames River meets certain financial performance targets on Dec. 31, 2011, and June 30, 2012.
“We believe (the acquisition) will accelerate the shift to higher fee margin products and enhance our distribution capabilities,” Alain Grisay, CEO of F&C, said in a statement.
Thames River was established by Pacific Investment Group, which seeds asset management firms.
Dutch plan dumps GSAM, SEC troubles not a factor
Pensioenfonds Vervoer terminated Goldman Sachs Asset Management as fiduciary manager in a €7 billion ($9.3 billion) mandate, according to Patrick Groenendijk, chief investment officer of the €9 billion fund.
Mr. Groenendijk said the move is not related to SEC civil charges against Goldman Sachs, GSAM's parent company. “We have been working for a long time evaluating the underperformance” of GSAM, Mr. Groenendijk said in a telephone interview. “The process began last year — long before (the issues with) the SEC became known.”
Northern Trust, the fund's global custodian, was appointed as interim fiduciary manager. KPMG is advising. GSAM spokesman Niklas Ekholm declined to comment.
Hedge funds stay positive in first quarter
Hedge funds extended their performance streak for the fourth consecutive quarter, with all major hedge fund indexes turning in positive returns in the first three months of 2010.
The 3.5% year-to-date March 31 return of the Hennessee Hedge Fund index led the pack, followed by Barclay Hedge Fund index, 3.45%, and Credit Suisse/Tremont Hedge Fund index, 3.09%.
Three-month returns of other major indexes included Greenwich Global Hedge Fund, 2.9%; HFN Hedge Fund Aggregate Average, 2.8%; HFRI Fund Weighted Composite, 2.56%; and Eurekahedge Hedge Fund index, 2.16%.
Hedge funds were buoyed by exuberant equity market returns, although for the second straight quarter all major hedge fund indexes trailed the S&P 500 index, which returned 5.36% for the three months ended March 31.
Some indexes did outperform the 3.21% return of the MSCI World index and all outperformed the 1.78% return of the Barclay Capital Aggregate Bond index for the period.
Collective performance of hedge funds of funds in the first quarter was less than half that of the best-performing single manager hedge fund index, as evidenced by the 1.45% return of the HFRI Funds of Funds Composite index for the quarter.
State, local plans' assets up
The 100 largest state and local government retirement systems, in terms of assets, had a total of $2.45 trillion as of Dec. 31, up 3.2% from three months earlier, according to a U.S. Census Bureau report.
The plans had a combined $828.3 billion invested in U.S. corporate stocks in the fourth quarter, up 0.5% from the previous quarter, and $420 billion in U.S. corporate bonds, down 2.9%, according to the report.
Total assets in international securities were $421.3 billion, up 15.3% from the end of the previous quarter, the report said.
The plans' holdings in U.S. Treasuries totaled $146.7 billion as of Dec. 31, up 4.8% from the end of the previous quarter.
Hewsenian joins Helmsley as deputy CIO
Rosalind M. Hewsenian was named deputy chief investment officer of the $3 billion Leona M. and Harry B. Helmsley Charitable Trust. The position is new.
Ms. Hewsenian said her hiring is part of an evolving effort by Linda B. Strumpf, CIO and chairman of the trust's investment committee, to set up an internal investment office.
Ms. Hewsenian said she eventually will take over as CIO, pending final approval by the trustees, and Ms. Strumpf will remain chairman of the investment committee.
Ms. Hewsenian was CEO of Clay Finlay, which was closed by parent company Old Mutual Asset Management in July 2009. Prior to that, Ms. Hewsenian served in senior executive capacities with Wilshire Associates.
Investment officer chosen for New Mexico
Steven Moise was appointed state investment officer by the $14 billion New Mexico State Investment Council. He had been interim investment officer since March.