Illini shift $2 billion
The $9.9 billion State Universities Retirement System of Illinois hired Northern Trust to manage $1.75 billion in indexed equities, terminated Standish Ayer & Wood for $160 million in core fixed income and gave Brinson Partners another $50 million for non-U.S. equities.
Northern Trust will invest in a separate account tied to the Wilshire 5000 index; a $2.9 billion U.S. equity index commingled fund managed by Barclays Global Investors will be reduced, said CIO Kenneth E. Codlin.
BGI will manage the balance in a planned commingled fund also tied to the Wilshire 5000, he said. Previously, the assets were tied to a BGI U.S. equity index.
Standish Ayer's assets will be added to a $1.3 billion core fixed-income portfolio run by PIMCO. Ennis Knupp assisted.
MAM exec to Hotchkis
Nigel Hurst-Brown, Mercury Asset Management managing director, has been appointed co-head of Hotchkis and Wiley, a job he will share with longtime Hotchkis portfolio manager Michael Baxter. Michael Quinn, Hotchkis' CEO, will retire.
The changes are effective Jan. 1.
McMorgan, funds settle
McMorgan & Co. paid more than $13.7 million, including interest, to 10 pension plans for which it served as investment manager as part of a settlement with the Labor Department.
The 10 pension plans in California and Nevada had assets of $4.9 billion at the end of 1996. A Labor Department investigation found the firm had entered into imprudent construction loans on behalf of the pension funds in the 1980s.
New LACERA benchmark
The $24 billion Los Angeles County Employees' Retirement Association changed its international equity benchmark to the MSCI All Country World index ex-U.S., from the EAFE, said Lisa Mazzocco, principal investment officer.
LACERA made the change because it was looking for a broader benchmark that included emerging markets.
Option repricing ruling
The SEC said last week that companies no longer can rely on SEC rule 14a-8 -- the "ordinary business" exclusion -- to omit resolutions on the subject from their proxy materials.
The decision was announced in a no-action letter to General DataComm Industries. William E. Morley, senior associate director in the SEC's Division of Corporation Finance, told the company it cannot omit the State of Wisconsin Investment Board's proposal to amend the company's bylaws to require shareholder approval of all repricings.
Private equity, realty moves
The $23 billion Pennsylvania State Employes' Retirement System trustees approved allocations totaling up to $365 million in private equity and real estate, said Geoffrey S. Yuda, spokesman.
In private equity, the board approved up to $75 million to Madison Dearborn III for a wide range of private equity transactions; up to $35 million each to APAX European Venture Fund IV for investment in pan-European companies, Cerberus Institutional Partners for distressed debt securities and Lexington Capital Partners III for mezzanine secondaries; up to $30 million to Great Hill Partners, media and information; up to $30 million to Frazier Healthcare III, health care; and up to $25 million to M/C Venture Partners IV, communications technology.
In real estate, the board approved allocations of up to $50 million each to Blackstone Real Estate Partners III and Oaktree Capital's OCM Real Estate Fund II.
All allocations will be funded from cash. Cambridge assisted on private equity; Townsend, on real estate.
City Council OKs bond issue
The Philadelphia City Council last week approved a $1.25 billion pension obligation bond issue, said Ben Hayllar, director of finance. The bond, which will be issued in January by the Philadelphia Authority for Industrial Development, will go to reducing the $2.7 billion unfunded liability facing the $3.4 billion Philadelphia Municipal Employees' Retirement System.
UAM marketing change
UAM Investment Services will no longer market its affiliates to defined benefit plan sponsors, opting instead to focus on selling its mutual funds to financial advisers and financial services companies. Company officials will try to find other jobs in UAM for the 12 staffers who will be laid off.
Butt hires PIMCO
H.E. Butt Grocery Co. hired PIMCO to manage $20 million in domestic bonds for its $700 million 401(k) plan and expects to change the portfolio style to global bonds within a year, said Thomas Witt, director, investment and retirement plans.
Mr. Witt said he expects the style shift to bring a better investment return.
Fischer, Francis, Trees & Watts' $24 million in domestic bonds also will switch to global.
University taps Cadence
The University of South Dakota hired Cadence Capital Management to replace Nicholas-Applegate as manager of a $7.5 million midcap growth U.S. equity portfolio, said Karen Davies, manager of financial affairs for the $47 million endowment. Nicholas-Applegate continues to manage $2 million in emerging markets equities.
New program at NYC Fire
The $5.2 billion New York City Fire Department pension fund launched an emerging manager program, hiring four firms for a total of $80 million, said Richard Halverson, deputy director of pensions.
Manager of managers Progress Investment Management will oversee $50 million in fixed income and U.S. equities; Taplin, Canida & Habacht, $10 million in fixed income; New Amsterdam Partners, $10 million, midcap equities; and MDL Capital, $10 million, government bonds.
First Data picks 2
The $590 million defined benefit plan of First Data Corp. hired J.&W. Seligman to replace Delaware Investments Advisers as a $50 million large-cap growth U.S. equity manager, and Harris Investment Management was hired to manage a $30 million large-cap U.S. equity portfolio.
Swiss fund taps PIMCO
Anlagestiftung Asea Brown Boveri has hired PIMCO Global Advisors (Europe) to run a 280 million Swiss franc ($207 million) actively managed global bond portfolio, said Daniel Dubach, who oversees asset management for the 4.9 billion franc fund.
Borg-Warner eyes change
The $250 million Borg-Warner Automotive pension fund is studying allocations to international equities and domestic small-cap, said Margaret Annett, director-financial planning and investments. The fund's current $150 million equity allocation is all large-cap domestic.
Elfner to retire
Albert "Chip" Elfner III will retire June 30 as president and CEO of Evergreen Investment Management.
Christopher P. Conkey, senior portfolio manager and CIO head of the fixed-income group, will succeed him.
North Miami taps Salomon
The $80 million City of North Miami Public Employees' Retirement System's investment committee picked Salomon Smith Barney as its first full retainer consultant, pending full board approval, said Carlos Perez, finance director. A manager review will begin soon.
Becker retiring
Murray Becker, stable-value portfolio manager at J.P. Morgan Investment Management and considered the founder of the GIC business, will retire at the end of the year. His duties will be assumed by other staffers.
Masons hire consultant
Cement Masons of Southern California hired Wurts & Associates as the $265 million pension plan's first consultant, said Kim Hauk, assistant administrator. Wurts will conduct an asset allocation study.
Former PSCA exec dies
Walter Holan, former president of the Profit Sharing/401(k) Council of America, died Dec. 3 at his home in Chicago. He was 79.
Mr. Holan was a tireless lobbyist and advocate for profit-sharing plans.
Fox picks Fidelity
Fox Inc. hired Fidelity Investments to replace record keeper Towers Perrin after it requested being removed, said Lynn Franzoi, senior vice president of benefits for the $169 million 401(k) plan. The plan now will be daily valued.
Waltham hires Wainwright
The $100 million Waltham (Mass.) Contributory Retirement System hired H.C. Wainwright as its first investment consultant, confirmed Dennis P. Quinn, city auditor.
Staff expanded
Celia Chapman and Christopher Pace were hired as directors of asset management at Forstmann-Leff International, in a move to expand the business, said Walter T. Dec, managing director.
Ms. Chapman previously was an investment analyst at Hughes Investment Management; Mr. Pace formerly was a vice president at BT Alex. Brown.
Mueller leaving Hill
Russ Mueller, a Republican pension staffer on the House Education and Workforce Committee, and the only actuary on Congress' staff, is joining the law firm Greenberg Traurig as director of retirement and health-care policy issues.
CalPERS vote results
William Crist and Michael Flaherman have been re-elected, and Robert Feckner has been elected for the first time, to the $141 billion California Public Employees' Retirement System Board of Administration, according to the unofficial vote count.
Euro fund gets nod
State Street Global Advisors has won U.S. regulatory approval to offer an offshore money market fund denominated in euros. The fund is geared toward pension funds, mutual funds and corporate cash.
Mike Karpic, a principal of SSgA in Boston, will transfer to London to manage the fund.
PBGC changes deadline
The PBGC is switching the deadline for annual insurance premium payments to Oct. 15 from Sept. 15. The change kicks in for the 1999 plan year.
New contract eyed
New York Board of Trade officials have signed a preliminary contract with Frank Russell to trade futures contracts on the Russell 1000 index, a large-cap equity index.
If approved by the board and regulators, the contract could be launched in March, according to a NYBOT statement.
Hermes gets Lens stake
Hermes Pensions Management is planning to create a series of international corporate governance funds, by taking a majority stake in Lens Investment Management. Hermes Lens Asset Management, a joint venture between the two that is now 75%owned by Hermes, will be merged with Lens, the corporate governance group founded by Robert A.G. Monks and Nell Minow in 1992.
As a result, the British Telecommunications Pension Scheme, which owns Hermes and is the U.K.'s largest pension fund, has agreed to boost its investment in the Hermes Lens U.S. Fund by up to $100 million from $5 million.
