Florida halts soft dollars
The $92 billion Florida State Board of Administration will discontinue its soft-dollar program after uncovering the possible embezzlement of $400,000, said Tom Herndon, executive director. No one has been charged, but a former employee is under investigation by law enforcement officials.
BT quits Teamsters account
Bankers Trust has resigned as named fiduciary for the $19 billion Teamsters Central States pension fund, said Mark Angerame, director of financial services.
Central States is now searching for two named fiduciaries, each to receive responsibility for 50%of the fund, Mr. Angerame said. He said Morgan Stanley, named fiduciary for 85% of the fund, is in the bidding.
Bankers was hired last year to oversee 15%of the fund. The resignation came after Teamsters officials learned Bankers was under investigation by the government for fraud in its transaction-processing unit. Bankers has since paid a $60 million fine and pleaded guilty to three counts of fraud.
Continental eyes outsourcing
Continental Airlines may hire Frank Russell to manage all or part of its $1.2 billion in pension assets.
John Morris, managing director-treasury operations, said outsourcing investment management to Russell is something "we have explored," but "just because we explored it doesn't mean we'll do it."
He said research has been completed, so it's too late for any other firms to gain consideration.
Ward's to terminate plan
Montgomery Ward will terminate its defined benefit plan, worth $1.5 billion as of Sept. 30, as part of its bankruptcy restructuring.
Under a settlement approved by U.S. Bankruptcy Court in Delaware, the company will use 25% of surplus pension assets to fund a new retirement plan for active employees, said Chuck Knittle, a Ward's spokesman. The rest will be used to settle bankruptcy debts.
New cash balance bill
Lawmakers introduced legislation in the House and the Senate that would require companies to give participants more information about benefit cutbacks when they convert traditional pension plans to cash balance plans. The legislation -- the Pension Right to Know Act -- would require companies to give participants estimates of benefit cuts.
Meanwhile, Rep. Earl Pomeroy, D-N.D., as expected, is planning to introduce legislation that would help revive defined benefit plans by making it easier for employers to offer cash balance and other hybrid pension plans that incorporate features of defined contribution plans.
Private equity, realty hires
The $24 billion Pennsylvania State Employes' Retirement System approved new allocations of $355 million in private equity and real estate.
The fund approved allocations of $100 million each to J.P. Morgan and HarbourVest Partners for venture capital funds-of-funds, said spokesman Geoffrey S. Yuda. The board also approved allocations of up to $75 million to Hellman & Friedman IV for buyout investing and up to $30 million to Amphion Capital Partners for investments in European growth companies.
In real estate, the board approved allocations of up to $25 million each to Berwind Property Group Fund V and Oxford Investment Partners.
Non-compete issue in court
Money manager James Cowperthwait is scheduled to go to court Tuesday to fight the lawsuit filed against him by U.S. Trust Corp.
Mr. Cowperthwait recently resigned as chairman of U.S. Trust's investment division -- Campbell, Cowperthwait --to start his own firm. Twenty-two of the 26 people at Campbell, Cowperthwait followed him.
U.S. Trust received a temporary restraining order against Mr. Cowperthwait and his group last week, designed to prevent Mr. Cowperthwait from soliciting his former pension fund clients.
Fund shifts indexed assets
The $930 million Pennsylvania Municipal Retirement System will shift assets to a Russell 1000 value fund from State Street Global's S&P 500 index fund in a rebalancing back to value equity, said James Allen, secretary.
Foundation hires bond firm
The $46 million Miami-Dade Community College foundation hired Taplin, Canida & Habacht as a domestic fixed-income manager to run $6 million, said Eddie Cadens, CFO and treasurer. Funding will come from reducing an $11 million bond portfolio managed by Seneca Capital Management.
Callan Associates assisted.
Oklahoma Police tap WPG
The $1.1 billion Oklahoma Police Pension & Retirement System hired Weiss, Peck & Greer as an additional private equity manager to run $7 million, said Robert J. Wallace, executive director. Funding will come from reducing domestic fixed income. Asset Consulting Group assisted.
Norfolk County hires
The $340 million Norfolk County Retirement System picked Wilshire as a venture capital manager to run $4 million in a fund of funds, said Timothy Cahill, county treasurer.
Attleboro picks 3
The $50 million Attleboro Municipal Contributory Retirement System hired two equity managers and a fixed-income manager to replace BankBoston, which managed most of its assets in a balanced portfolio, said Kevin Leonard, the Segal Advisors consultant who assisted.
The pension fund hired Boston Advisors to manage $17 million in core domestic equities; Daruma, $2 million, commingled domestic small-cap equities; and ARM Capital Advisors, $17 million, core domestic fixed income.
BankBoston was terminated over concerns about high employee turnover and a change in investment style. BankBoston officials did not return phone calls by press time.
Quaker trust picks manager
The Joseph Rowntree Charitable Trust, with L148 million ($241 million) in assets, chose R.C. Brown to run L25 million in U.K. equities with strict ethical criteria, said Steven Burkeman, secretary.
The Quaker trust "looked at a number of options and felt they would do the job the best," he said. The investment criteria exclude companies that produce armaments, use animals for testing or produce alcohol.
Funding came from Henderson, previously sole manager.
Reinking leaves Ibbotson
Ricardo Reinking, former vice president in charge of Ibbotson Associates' consulting unit, has left the company. Mr. Reinking joined Ibbotson late last year.
"It was not a good fit. We did (part) amicably," he said.
Laura Ellsworth, spokeswoman for Ibbotson, said Mr. Reinking was expecting a different kind of job, and Ibbotson was expecting a different kind of person. Mr. Reinking's position will be filled by senior consultant Jeff Schwartz.
Leinweber leaves 1st Quadrant
Managing Director David J. Leinweber left First Quadrant to form a firm that will design technologies that use the Web for making investment decisions. Robert Arnott will be assuming most of Mr. Leinweber's duties. Mr. Arnott said there's "a decent chance" First Quadrant could be his first client.
School terminates manager
The $810 operating fund pool at Texas A&M University System terminated Smith, Graham and handed its $130 million core plus fixed-income account to the system's other fixed-income manager, Payden & Rygel, which previously managed $109 million.
Greg Anderson, associate deputy chancellor and treasurer, said he was concerned because of recent staff turnover at Smith, Graham. Also, he said the university wanted to consolidate its fixed-income assets. Fund Evaluation Group consulted.
Flint moves into indexing
The $750 million City of Flint Employees' Retirement System hired Bankers Trust and State Street Global Advisors as its first S&P 500 index fund managers, said Lisa Dedolph, retirement supervisor. Portfolio sizes and funding source are still undetermined. Callan assisted.
Virginia in realty fund
The $32.4 billion Virginia Retirement System agreed to invest $33 million in Hines Real Estate Fund II, which invests in office buildings throughout the country. Funding will come from cash, said Bill Sullivan, a spokesman.
BT unit for sale
Bankers Trust is seeking a buyer for its Australian asset management arm, BT Funds Management, because it overlaps with Deutsche Bank's existing business, according to company executives.
The Sydney operation manages U.S.$26 billion in retail and institutional accounts. It is the country's largest retail mutual fund manager and the second largest institutional funds manager.
Manager dies
Jerry Kennedy, chief investment officer and founder of Kennedy Capital Management in St. Louis died, apparently of a heart attack, March 17 aboard a cruise ship. He was 65. Richard Sinise, co-founder of the firm, has taken over as CIO,
