FORT WORTH, Texas -- American Airlines terminated Morgan Stanley Asset Management as an international equity manager, replacing the firm with Lazard Asset Management and Independence Investment Associates, said William Quinn, president of AMR Investment Services Inc., which oversees the management of the $11 billion fund.
Of the $700 million Morgan managed, Lazard will run $500 million in a value style; and Independence will run $200 million in an international amplified alpha portfolio.
American and Morgan ended their relationship, Mr. Quinn said, by "mutual agreement" because the value style that Morgan used "had changed from what we hired them to do. They held on to stocks as they became overpriced, so a large portion of the portfolio was no longer being managed in the value style."
A spokesman for Morgan declined to comment on the move.
Montana Power sets asset allocation study
BUTTE, Mont. -- The $262 million defined benefit plan of Montana Power Co. plans to begin an asset allocation study this quarter that could lead to manager changes, according to Jerrold Pederson, vice president and chief financial officer.
The asset mix now is 61.6% domestic equity, 8.6% international equity and 29.8% domestic fixed income.
The target is 60% domestic equity, 10% international equity, 25% domestic fixed income and 5% cash, said Neal Hansen, financial analyst for the Montana Power plan.
Mercer will conduct the study.
Plan narrows search for first bond manager
DEARBORN HEIGHTS, Mich. -- The Dearborn Heights Employee Pension System narrowed a search for its first domestic fixed-income manager for the $35 million General Government Pension Board, said John Riley II, executive director.
Finalists for the $15 million mandate are incumbents Loomis, Sayles and Rhinehart & Mahoney. Each now runs $15 million in balanced accounts.
Salomon Smith Barney, the fund's consultant, recommended switching to domestic fixed-income portfolios from balanced accounts.
The system also chose three finalists to run a $7.5 million large-cap growth U.S. equity portfolio. While declining to name the finalists, Mr. Riley said the new hire will replace a domestic equity manager he wouldn't name. A decision is expected by April.
The $101 million Police & Fire Pension Plan also is part of the Dearborn system.
County fund sets manager review
CHICAGO -- The Cook County Annuity & Benefit Funds will review managers, and possibly terminate some firms, said John Fitzgerald, executive director for the $4.7 billion fund.
The review will take a few months, Mr. Fitzgerald said. A reallocation between managers and/or asset classes is likely to result, but it is too early to know for sure, he said.
Middlesex County releases short list
CAMBRIDGE, Mass. -- The Middlesex County Retirement System picked five finalists for a $27 million domestic midcap growth stock portfolio. They are: Batterymarch; Forstmann-Leff International; Massachusetts Financial Services; Seneca; and Zak Capital.
The system also chose Boston Partners and INVESCO as finalists for a $31 million domestic midcap value equities portfolio.
Finalists for a $23 million domestic small-cap growth portfolio are Aeltus; Essex; Batterymarch; Loomis, Sayles; and Morgan Grenfell. The fund will make its selection March 25.
The fund postponed until April 8 the selection of finalists in its search for domestic small-cap value managers to manage about $25 million.
New York unions form pension council
NEW YORK -- The New York City public employee unions whose members belong to the city's five pension systems have formed the Municipal Labor Committee Pension Trustees' Coordinating Council.
The council, which will be chaired by James Savage, president of the Patrolmen's Benevolent Association, adopted a series of goals to guide the investment of the systems' $91 billion in assets.
The goals are: to share information regarding current and future investments of the pension funds and to coordinate, when possible, common system investment policy objectives; and to explore how the union trustees can maximize the use of pension fund assets to protect the financial stability of the systems while providing funding for investments benefiting the members of the systems, the retirees receiving the benefits and the city, and still provide adequate returns.
Firm seeking new emerging market mandates
COATESVILLE, Pa. -- Emerging markets manager City of London Investment Management, which closed to new clients in December 1996 when it had $1 billion under management, is seeking new emerging market mandates. The firm now has $700 million under management, primarily for endowments and foundations, and is willing to take on an additional $500 million, according to John Conlin, marketing director.