DAYTON, Ohio - The Monarch Machine Tool Co. will review its defined benefit and 401(k) managers as part of a move to terminate its overfunded defined benefit plans for salaried and nonbargaining hourly employees. It expects to recapture some $10 million in excess pension assets in the move.
Frank Russell manages the equity and Key Bank the fixed income for the defined benefit plans. The amounts weren't available.
The 401(k) plan is managed by Diversified Investment Advisors.
Karl A. Frydryk, chief financial officer, said changes might come in 1999, although he couldn't specify a timetable. The company isn't working with a consultant, he added.
As a replacement for the terminated plans, the company will start a cash balance plan with $4 million, using Russell and Key for now as the managers. It also plans to increase its corporate match, now at 10%, to its existing 401(k) plan. Mr. Frydryk wouldn't say the percentage. More money could come into the 401(k) from part of the benefits participants will receive from the terminated plans, he added.
The plan terminations are subject to approval by the Internal Revenue Service and Pension Benefit Guaranty Corp.
The company has a $10 million defined benefit fund for its union employees, which will be unaffected by the moves. It also uses Russell and Key as managers.
Texas Teachers reduces
real estate staff
AUSTIN, Texas - The Teacher Retirement System of Texas reduced its real estate staff to five from seven, because it has sold most of its assets, said Howard Goldman, spokesman for the $70.7 billion fund.
The staff now consists of a chief asset manager, three asset managers and an administrative technician. The asset managers now have oversight responsibility for the mortgage portfolio previously managed by the agency's loan portfolio manager, while the chief asset manager is responsible for the department's day-to-day operations. The pension fund has $1.03 billion invested in real estate.
Nashville & Davidson County
boosts international allocation
NASHVILLE, Tenn. - The $1.2 billion Metropolitan Government of Nashville & Davidson County Benefit Board will increase its allocation by $18 million each to international equity managers Nicholas- Applegate and Lazard Asset Management, said James Luther, executive secretary.
Funding will come from a $36 million international equity portfolio previously run by Brandywine Asset Management, which was terminated for performance reasons, said Mr. Luther.
Anthony Hitschler, chief investment officer for Brandywine, did not return phone calls.
Nicholas-Applegate managed $92 million and Lazard, $36 million, before the new allocation, said Mr. Luther.
MassPRIM drops
small-cap manager
BOSTON - The Massachusetts Pension Reserves Investment Management board terminated Capital Technology for performance reasons. Scott Henderson, executive director for the $22 billion fund, said the board also concerned was about ownership and succession matters at the firm. The small-cap manager ran $180 million, which will be placed into an enhanced index, he said.
Robb Rowe, Capital's chief investment officer, declined comment.
State fund delays
hiring decision
INDIANAPOLIS - The Indiana Public Employees' Retirement Fund has delayed a decision on hiring midcap growth and midcap value managers until next year, said William Butler, executive director of the $10 billion fund. Although information on managers in the search has been collected, board members have been occupied with noninvestment management-related issues, he said.
County hikes
small-cap exposure
FAIRFAX, Va. - The Fairfax County Police Officers Retirement System hiked its allocation to a domestic small-cap stock portfolio with Furman Selz Capital Management to bring its exposure more in line with its target, said Laurnz A. Swartz, executive director.
The $506 million system had $38 million with Furman Selz and increased the allocation by $10 million, he said. Funding came from reducing the system's exposure to BEA, its largest global fixed-income manager, which had a $109 million portfolio.
Mercer Investment Consulting assisted.
Trinity says yes to
Oppenheimer Acquisition
BOSTON - Trinity Investment Management has agreed to be acquired by Oppenheimer Acquisition, parent company of OppenheimerFunds, and will become an independent subsidiary of Harbour View Asset Management, OppenheimerFund's institutional money management arm.
Terms of the deal were not disclosed. Based in Boston, Trinity will continue to operate with the same staff and the same name, said Richard Tucker, managing director.
Trinity managed more than $8.2 billion for 100 institutional clients as of Nov. 30.
Alleghany takes stake
in small-cap manager
CHICAGO - Alleghany Asset Management Corp. acquired 40% of Veredus Asset Management, Louisville, Ky., a small-cap growth equity management firm with about $100 million in total assets under management. The small-cap aggressive growth fund Veredus launched in July has been renamed Alleghany/Veredus Aggressive Growth Fund. Alleghany manages about $32 billion in total assets.
UOB Global seeks
strategic partner
NEW YORK - UOB Global Capital wants to invest in small institutional asset management firms that need a little marketing support. It is looking for a strategic entrance into the U.S. defined benefit market rather than a controlling position in the firms, and it is not looking for revenue sharing, said Barry Gillman, principal. It initially will offer plan sponsors global and Asian bonds, Asian equity and combinations thereof.
UOB recently was formed by David Goss and Michael Landau, both formerly of AIG's asset management companies, along with the United Overseas Bank Group of Singapore, which owns 70% of UOB Global.
The operation completed its first investment a month ago, purchasing 20% of Midhurst Asset Management, London, which manages $35 million in predominantly institutional assets, invested in global fixed income.
Vanguard Furniture
consolidates plan
HICKORY, N.C. - The Vanguard Furniture Co. consolidated its former 401(k) and profit-sharing plans into a $15 million 401(k) plan, according to Keith Hart, vice president of operations for Vanguard.
First Union, which had administered Vanguard's 30-year-old profit-sharing plan, will manage the investment of the combined assets, he said. The plan will continue to have a profit-sharing-like feature in that at the end of the year, Vanguard Furniture will make a discretionary contribution into the 401(k) plan based on profitability, Mr. Hart explained. Vanguard also is narrowing the investment options for its 3-year-old 401(k) plan to 13 mutual funds from 26.
PBGC loosens
payment schedule
WASHINGTON - The Pension Benefit Guaranty Corp. has agreed to let LTV finance six of its largest pension funds on a looser funding schedule than before.
The agreement recognizes that LTV has already contributed $2.8 billion to its pension plans since 1993, when it emerged from bankruptcy. Under the agreement, LTV will be able to contribute to its plans on a straight-forward "standard" funding schedule, rather than a combination of fixed and variable payments. Moreover, LTV will buy back about $62 million worth of notes the PBGC had received from LTV in 1993.
Hilton plans
401(k) changes
BEVERLY HILLS, Calif. - The Hilton Hotels Corp. plans to change a Fidelity fund in its $120 million 401(k) fund, said Craig Armstrong, vice president-financial administration.
It plans to replace the Growth Fund with the Fidelity Fund. Both have large-cap growth stocks, but he said the latter fund meets participants' objectives better.
He expects the change to take place sometime next year.
Boston Financial
acquires Schroder
BOSTON - Boston Financial has acquired Schroder Real Estate Associates, a real estate adviser, from its senior management and Schroder U.S. Holdings. Terms of the sale were not disclosed.
The acquisition will increase Boston Financial's total real estate assets under management to $5.4 billion from $4.5 billion. The sale also includes Schroder's wholly owned property management subsidiary, Schroder Center Management.
Norman Peck, Leanne Lachman and Mark Peskin, managing directors at Schroder, will continue as managing directors with Boston Financial.
CalPERS ups
allocation ante
SACRAMENTO, Calif. - CalPERS' trustees allocated an additional $40 million to Newland Capital Advisors for its single-family residential acquisition and development program in California, $20 million more than CalPERS' staff had recommended but $20 million less than Newland sought.
The internal rate of return to CalPERS for Newland projects is 21.14%. The total allocation to Newland is now $100 million, and Newland can reinvest the CalPERS' money in new projects as old ones are completed.
Separately, in a search for an external partner to help manage the Sacramento-based fund's small and emerging money manager development program, CalPERS' staff is sending out solicitations to potential partners. The selection is expected to be made in May of instead of March, as originally anticipated, said Robert L. Boldt, senior investment officer for public markets with CalPERS.
The program calls for CalPERS to spend $40 million in assisting small managers with marketing, administration and technological needs. In exchange, the small managers will give the fund an equity interest in their firms. CalPERS also will allocate a total of $2 billion for the managers.
County reviews
actuarial proposals
TOWSON, Md. - The Baltimore County Employees' Retirement System is reviewing proposals for actuarial services, said Robert Burros, investment administrator at the $1.6 billion fund.
Buck Consultants has been the system's actuarial consultant since 1945, and its contract is due to expire in June.
A decision on whether to retain Buck or hire a new firm will be made in February, Mr. Burros said.
Clearing corporation
executive dies
ENGLEWOOD CLIFFS, N.J. - Robert J. Woldow, the managing director, general counsel and corporate secretary for National Securities Clearing Corp., known for his work in developing clearing and settlement systems and capital markets, died Dec. 16 of a heart attack.
He was 53 years old.
Mr. Woldow was with NSCC since its founding in 1976. In addition to legal affairs, he had been responsible for the risk management, membership and compliance departments of NSCC.
Mr. Woldow is survived by his wife, Roberta, his sons, Gregory and Brian, and a brother, James. Funeral services were held Dec. 20 at the Menorah Chapels.
A memorial fund is being established; those wishing to contribute should contact NSCC at 55 Water St., New York, NY 10041.
