Universe back to positive
U.S. pension plans, endowments and foundations in the Northern Trust universe had a median 8% gain for the third quarter, rebounding from the median 4.7% loss three months earlier.
The relatively large allocations by endowments and foundations to alternative asset classes, which cushioned their second-quarter declines, left them trailing public and corporate pensions during the latest quarter. Corporate and public pension plans, with composite alternatives allocations of less than 10%, posted median gains of 9.1% and 8.8%, respectively.
The median gain for endowments and foundations, which reported a composite alternatives allocation of close to 40%, was 7.4%.
The universe tracks the performance of about 300 large institutional investment plans with combined assets of $630 billion.
UVIMCO taps Kochard
Lawrence Kochard was named CEO at the University of Virginia Investment Management Co., which oversees $4.6 billion in assets for UVa. He begins on Jan. 1, according to a news release on the university's website.
He replaces Christopher Brightman, who resigned in March and joined Research Affiliates on May 1 as a strategist.
Mr. Kochard is CIO of the $899 million endowment of Georgetown University. He founded the school's investment office. Georgetown has launched a search for Mr. Kochard's successor, university President John J. DeGioia said in a letter to staff obtained by Pensions & Investments.
DB participants surveyed
Nineteen percent of workers in employer-sponsored defined benefit plans are “very confident” that they will receive income from their pension in retirement, down from 24% in 2008, according to a Mercer survey.
Thirty-five percent said they are confident and somewhat confident, and 11% said they are not confident at all, according to a Mercer news release on the survey results.
Andrew Yerre, Mercer's U.S. defined benefit business leader, said in an interview that he believes there is a fundamental misunderstanding among many employees about how pensions work.
“I think it has to do with, perhaps, the way it's being communicated; (employees) don't have a good understanding of the benefits,” Mr. Yerre said, noting these statistics should be a “call to action” to employers to better educate workers.
Oregon adds to Sheridan
Oregon Investment Council made a follow-on commitment of up to $50 million to Sheridan Production Partners II-B, raising the council's total commitment to up to $150 million, said spokesman James Sinks. The commitments are all subject to contract negotiations.
Sheridan is a joint venture between private equity firm Warburg Pincus and Lisa Stewart, CEO of Sheridan, which invests in mature oil and gas properties that have not been maintained or are in decline and hedges gas and oil production to mitigate volatility.
The council manages the $54 billion Oregon Public Employees Retirement Fund.
Life raft for Sea Island plan
The PBGC plans to take over the defined benefit pension plan of Sea Island Co., confirmed Gary Pastorius, an agency spokesman.
The company is selling substantially all of its assets in Chapter 11 bankruptcy proceedings and the Sea Island Co. Retirement Plan faces abandonment, Mr. Pastorius said.
The plan is 48% funded, with assets of $37.3 million and liabilities of $77.2 million; the PBGC expects to be responsible for $36.2 million of the shortfall, a news release said.
The Sea Island plan was terminated Oct. 29. Mr. Pastorius said it was unclear when the plan would be formally taken over by the PBGC.
Illinois SURS lowers rate
The $12 billion Illinois State Universities Retirement System, lowered its assumed rate of return to 7.75% from 8.5%, said William E. Mabe, executive director.
He said the decision was based on economic forecasts and the fact that the system continues to draw down assets to pay benefits. The system's actuary, Gabriel Roeder Smith, and general consultant Hewitt Ennis Knupp recommended the change.
Separately, the system is searching for an associate executive director to succeed Judith Parker, who is retiring in May, Mr. Mabe confirmed. The position oversees SURS' operational service and IT-related activities, among other duties. The job posting is available here.
Applicants should contact Mary L. Hobson, executive vice president of executive search firm EFL Associates, at [email protected].
Some still lag, report says
Almost half of managers said one or more of their hedge funds was below the asset peak it must return to before performance fees can be charged, as of the first quarter, according to Greenwich Associates.
At least one fund in 45% of U.S. firms and half of those in Europe and Asia hadn't reached their peaks from before the financial crisis, Greenwich said in the Oct. 28 report. Managers can't collect performance fees, usually 20% of profits, for funds below their top values.
“The fact that so many funds remain under their high-water marks after a period of historically strong market performance demonstrates how great an impact this crisis had on hedge funds of all sizes and strategies,” John Feng, a Greenwich consultant, said in the report.
Assets from endowments and foundations fell to 12% from 14% in 2009. Stakes owned by corporate pension funds decreased to 8% from 9%, while shares held by hedge funds of funds, which earn fees by picking a mix of managers for clients, dropped to 23% from 26%.
Public pension funds were the only ones whose portion of assets rose, increasing to 9% from 8%.
Arizona Safety commits
The $6.4 billion Arizona Public Safety Personnel Retirement System committed up to $40 million each to LSV Special Opportunities Fund III, a credit fund, and Luxor Capital Partners, an event-driven multistrategy fund, confirmed James Hacking, administrator.
Both investments are part of the fund's absolute-return category.
The pension fund also increased its previous commitment to ORG AZ Secondary Opportunity real estate fund to $97 million from $65 million.
New exec at Ohio Schools
Lisa J. Morris was named executive director of the $9.1 billion Ohio School Employees Retirement System, Columbus. She had been interim director since James R. Winfree retired in April.
Highbridge gets Brazilian fund
Highbridge Capital Management, J.P. Morgan Chase's hedge fund business, agreed to acquire a majority stake in Brazil's Gavea Investimentos.
Terms were not disclosed.
Two join Corinthian Cove
Richard Graf and Sheila Warner joined Corinthian Cove Consulting, a strategic consulting firm to money management firms, as partners. Both positions are new.
For Mr. Graf, the new position represents a return to the industry following his retirement in 2009 as CEO of Marco Consulting. Ms. Warner had been a senior vice president and executive director of Callan Associates' investment training center until June 2009, according to Callan spokeswoman Nancy Malinowski.
