Illinois funding bill OK'd
The Illinois Senate on April 15 passed legislation to pay all of the required annual state contributions to the five Illinois pension funds — totaling $4.5 billion — for the next fiscal year without selling pension bonds, according to a statement from state Senate Democratic caucus staff.
The contributions would be for the fiscal year starting July 1 if the bill is signed by Gov. Pat Quinn.
Under the legislation, the $34.6 billion Illinois Teachers' Retirement System would receive an estimated $2.4 billion; $13.7 billion Illinois State Universities Retirement System, $980.5 million; and the $9.97 billion Illinois State Employees' Retirement System, $420 million Illinois Judges' Retirement System and $105 million Illinois General Assembly Retirement System would receive a combined $973.6 million.
Asked if Mr. Quinn would sign the legislation, spokeswoman Kelly Kraft said in an e-mail: “The governor has always supported the full funding of pensions” and would review it.
Columbia buys Grail
Columbia Management Investment Advisers on April 15 announced it agreed to buy active ETF manager Grail Advisors. Terms were not disclosed; the deal is expected to close next month.
Columbia will rebrand Grail's five active ETFs and manage the funds with its own investment personnel, Christopher Thompson, Columbia's head of product management and marketing, said in a telephone interview.
“We are very excited because it gives us entry into the new market quickly,” Mr. Thompson said, adding that the acquisition speeds up the registration process with the SEC to offer ETFs. Columbia, a subsidiary of Ameriprise Financial, has no ETFS of its own.
Grail's five ETFs — three equity, two fixed income — have combined assets under management of $23 million, but Mr. Thompson said they offer “a lot of room for growth.”
Hevesi sentenced
Alan Hevesi, former New York state comptroller, was sentenced April 15 to one to four years in prison for his role in the political influencing of investment business with the $140.6 billion New York State Common Retirement Fund.
Mr. Hevesi was sentenced by State Supreme Court Justice Michael J. Obus. He received the maximum sentence allowable, Eric T. Schneiderman, state attorney general, said in a news release.
Mr. Hevesi pleaded guilty in October to a felony charge of “receiving reward for official misconduct for receiving nearly $1 million in gifts in exchange for improperly favoring and approving $250 million in pension fund investments in private equity fund Markstone Capital Partners,” the release said.
LM Capital buys back stake
LM Capital Group bought back the 35% share of the money manager firm it sold to a CalPERS joint venture in 2002, confirmed John Chalker, LM Capital managing director.
Mr. Chalker said the group repurchased its minority share from Investment Group Ventures, which had formed the joint venture with the pension fund to buy the stake in LM Capital.
LM Capital's assets were $4.7 billion as of March 31, from $487 million when CalPERS made its buy.
S.F. system yanks Ashmore
The $15.1 billion San Francisco City & County Employees' Retirement System terminated Ashmore Investment Management, which ran $18 million in an emerging markets equity strategy, for poor performance, confirmed David Kushner, deputy director for investments at the fund.
The money has been transferred to emerging markets ETFs, Mr. Kushner said.
A report from Angeles Investment Advisors, San Francisco's consultant, said Ashmore had been under review since the third quarter of 2009. It said gross of fees, performance returns for the past one-, three-, five- and seven-year periods, all ended Dec. 31, had been in the bottom 95th percentile.
Andrew Yemma, Ashmore spokesman, said the company would have no comment.
J.P. Morgan Asset sets record
J.P. Morgan Chase reported $1.33 trillion in assets under management as of March 31, up 2% from the prior quarter and 9% higher than the year before.
Executives discussing the results on a conference call April 13 noted that net inflows for J.P. Morgan Asset Management's long-term equity, bond and alternative strategies rose to a record $27 billion in the quarter, offset by $9 billion in liquidity outflows.
At the end of March, equity and multiasset strategy assets were $421 billion, up 4% from the prior quarter and 19% higher than the year before.
Fixed-income AUM stood at $305 billion, up 6% and 24%, respectively, over the same periods. Assets in alternative strategies were $114 billion, up 6% and 18%.
But assets in liquidity strategies declined to $490 billion, down 1% from the prior quarter and down 6% from the year before.
PBGC hike call renewed
President Barack Obama, in his proposals April 13 to reduce the federal budget deficit by $4 trillion over 12 years, repeated his plan to give the PBGC authority to increase premiums on retirement plans.
The proposal, described in Mr. Obama's fiscal year 2012 federal budget on Feb. 14, would give the PBGC authority to increase premiums that companies pay into the system and impose higher premiums on riskier plans.
That increase was projected to bring an estimated $16 billion into the PBGC over a decade.
Florida drops Victory Capital
The $156.8 billion Florida State Board of Administration terminated Victory Capital Management, which ran $152 million in active international developed market small-cap growth equities, according to John Kuczwanski, communications manager.
The board reallocated the money to its existing managers.
Victory had been on watch for performance, according to a report to the board by Wilshire Associates, the board's consultant. Christopher A. Ohmacht, Victory co-CEO, said: “We don't comment on client actions.”
Commodities chief hired
Satu Parikh will join Harvard Management Co. in June as a managing director and head of commodities. It will be the first time someone has held that position since Jane Mendillo became president and CEO of HMC on July 1, 2008.
HMC manages the $27.6 billion Harvard University endowment,
Mr. Parikh was president and head of trading with RBS Sempra Commodities, where a spokesman for parent Royal Bank of Scotland said RBS Sempra was wound down over the past year.
N.Y. State exec goes to Aksia
Matthew Mullarkey will join hedge fund specialist consulting firm Aksia as a consultant on May 9, according to sources, who asked not to be identified.
Jim Vos, Aksia's CEO, head of research and principal, declined to comment.
Mr. Mullarkey is an investment officer specializing in hedge funds at the $140.6 billion New York State Common Retirement Fund. Information on replacing him was not available at press time.
Efforts to reach Mr. Mullarkey were unsuccessful.
