TCW's complaints in its lawsuit against DoubleLine Funds Trust, seeking to stop the marketing of DoubleLine Capital mutual funds, were dismissed.
California Superior Court Judge Carl J. West's Jan. 20 ruling allows TCW, within 30 days, to file new pleas and amend five of the seven claims in the suit. He ordered a hold in any further litigation in the case until the resolution of a separate lawsuit TCW filed against Jeffrey Gundlach, its former chief investment officer, and DoubleLine, which Mr. Gundlach formed in late 2009. That suit is scheduled for trial on July 25.
But Mr. West ruled two claims could not be refilled. One, a key demand of TCW, was to return profits of investors in the DoubleLine mutual funds. The judge said such restitution would violate federal law.
Peter Viles, TCW senior vice president, corporate communications, said that although the court dismissed the demand for returns from DoubleLine fund investors, there is “other injunctive relief that TCW can pursue in the case.” TCW plans to refile the five claims within the time frame required by the judge, Mr. Viles said.
Ron Redell, president of DoubleLine Funds Trust, who was not named as a defendant in the case, said in a statement: “By granting our motion to strike with prejudice, the court struck down TCW's unprecedented attempt to claim the returns of mutual fund investors.”
Also Verizon drops 'smoothing'
Verizon Communications is changing its accounting methods for pension and other post-employment benefits, which will assign $20.2 billion in losses to previous years, company executives said Jan. 21 in a conference call to securities analysts.
Verizon will recognize gains and losses in the year that they occurred instead of “smoothing,” or amortizing them over time, Fran Shammo, executive vice president and CFO, said.
The change will make accounting “more straightforward” and “more transparent,” he said. “We've been considering this for some time. For us, it was a question of when, not if, we would make this change.”
Mr. Shammo also said Verizon has lowered its assumed rate of return for 2011 to 8% from 8.5%, and it will take a cumulative $600 million pretax charge in 2010 for its revised accounting. The company had lowered its assumed discount rate to 5.75% in 2010 from 6.25% in 2009.
Verizon had $45.232 billion in retirement assets, including $25.255 billion in defined benefit assets, as of Sept. 30, according to Pensions & Investments data.
Alcoa to contribute $900M
Alcoa will contribute up to $900 million to its defined benefit plans in 2011.
Up to $600 million in Alcoa common stock will be contributed in the first quarter, and about $300 million in cash will be contributed later in the year.
In its 10-K, the company reported $8.53 billion in defined benefit assets and $11.64 billion in projected benefit obligations as of Dec. 31, 2009, for a funded ratio of 73.3%.
ComEd aids parent's funding
Exelon subsidiary ComEd sold $600 million in first mortgage bonds, with some of the proceeds going toward the company's planned $2.1 billion contribution to the parent's defined benefit plans in 2011, confirmed ComEd spokeswoman Arlana Johnson.
The bonds are set to mature on Jan. 15, 2014, with a coupon of 1.625%.
Exelon has $8.66 billion in defined benefit assets, according to Pensions & Investments data.
GE closes DB plan
General Electric closed its defined benefit plan to salaried employees hired after Dec. 31, according to Anne Eisele, director-financial communications.
New hires “will receive a new retirement contribution equal to 3% of eligible pay to their GE 401(k) account,” she wrote in an e-mail.
GE's principal defined benefit plans have a combined $42 billion in assets. The company has $18.115 billion in 401(k) assets.
“Pension has been a drag for a decade,” Jeffrey R. Immelt, GE's chairman and CEO, said at an investor outlook meeting last month.
Florida moves into timber
The $152.2 billion Florida State Board of Administration hired Hancock Timber Resource Group and Molpus Woodlands Group to run a combined $400 million in timberland investments, the first such investment for the board, said John Kuczwanski, communications manager.
Hancock will run $300 million and Molpus, $100 million, both in separate accounts.
The new timber allocation is part of the board's 11% allocation to strategic investments, which includes hedge funds and debt-oriented funds. The hirings are pending contract negotiations, Mr. Kuczwanski said. Townsend Group assisted in the search.
CalPERS, CalSTRS gain 12%
CalPERS returned a net 12.46% on its investments in 2010, while CalSTRS returned a net 12.7%.
CalPERS' return was just under its policy benchmark of 13.2%, while CalSTRS outperformed its benchmark by 24 basis points.
CalPERS has $226.6 billion in assets; CalSTRS has $140.1 billion.
New CIO at Rockefeller U.
Amy Falls was named chief investment officer and vice president for investment at The Rockefeller University, effective April 4, confirmed spokesman Joseph Bonner. She will oversee the office of investments and manage the university's $1.8 billion endowment.
Ms. Falls will replace Lisa Danzig, who is leaving to “pursue new challenges and new opportunities,” Mr. Bonner said.
Ms. Falls is CIO for Phillips Academy a high school with endowment assets of about $780 million. Michael Reist, the academy's director of investments, will be the interim CIO while a search committee is formed to seek a permanent replacement, said spokeswoman Tracy Sweet.
LACERS keeps pair
The $10 billion Los Angeles City Employees' Retirement System renewed its contracts with active domestic intermediate fixed-income managers LM Capital Group and Baird Investment Management, said spokeswoman Linda Aparicio, in an e-mail.
LM manages $242 million; Baird, $238 million.
Separately, fund officials plan to hire an executive search firm to assist in finding a new chief investment officer. The previous CIO, Daniel Gallagher, retired last year.
William Blair gets Guidance
William Blair will acquire hedge fund-of-funds firm Guidance Capital in the first quarter, confirmed Tony Zimmer, William Blair spokesman.
Terms were not disclosed.
The acquisition will increase William Blair's assets under management by about $300 million to $44.5 billion, Mr. Zimmer said in a telephone interview.
Guidance Capital manages hedge funds of funds in absolute return, equity long/short, commodities and managed futures strategies.
SSgA to run bond portfolio for Danish plan
The 5.5 billion ($7.4 billion) Laerernes Pension, Hellerup, Denmark, hired SSgA to manage $271 million in passive U.S. investment-grade corporate bonds. The portfolio will include an overlay to screen investments using environmental, social and governance criteria.