LONDON -- The National Association of Pension Funds has launched an inquiry into proxy-voting systems by U.K. pension funds that could lead to calls for electronic voting and changes in U.K. company law.
A number of U.K. pension funds are discovering votes of their shares are not being recorded, according to Lynn Ruddick, chairwoman of the NAPF Investment Company. Pension funds report more than 50% of shares are being voted, but company registrars reveal only 40% have been tallied. The issue is sensitive because NAPF officials are trying to stave off mandatory share voting.
The NAPF's report on the inquiry is expected to be completed in June 1999, and could lead to a call for electronic trading. Current U.K. company law makes it difficult -- if not impossible -- to cast votes electronically. Also, the adequacy of notification periods will be examined, especially when banks or custodians must contact clients on specific voting issues. Company law is facing a major revision over the next few years.
Cape Town diversifies pension fund
CAPE TOWN, South Africa -- Cape Municipal Pension Fund will diversify its portfolio by investing 15% of its $632 million in assets outside South Africa, according to a statement.
Assets will come from cash, said John Morris, managing director for TriStar International Consulting, the fund consultant. Mr. Morris added that no asset allocation study has been completed, but the fund expects to choose managers and be fully invested by March.
Watson Wyatt merges Italian business with ISSO
MILAN, Italy -- Watson Wyatt Worldwide has merged its Italian business with ISSO, a human resources consulting firm. The new company, Watson Wyatt ISSO SRL, will have about 35 associates. The combination gives Watson Wyatt greater presence in the Italian market while providing international ties for ISSO partners.
Elake Sampo to outsource international equities
HELSINKI, Finland -- Elake Sampo Insurance plans to outsource $200 million into international equities.
The insurer, which is currently 100% internally managed, plans to hire external money managers to run small-cap and midcap European equity mandates, and then U.S. and Asian mandates, said Jukka Vahapesola, portfolio manager-equities for the insurer's pension division.
The outsourcing is part of an effort to boost equity exposure for the 17 billion markka ($3.4 billion) insurance company. Plans are to boost equities to 18% or 19% of assets from the current level of 15%. About one-third of the increased equity allocation -- about $200 million -- may be handed over to external managers.
Nearly 90% of the insurer's equity assets currently are in Finnish stocks, with the rest in Scandinavian and other European large-cap stocks.
Over the next five years, Elake Sampo may boost equities to 25% to 30% of total assets, depending on local regulations.
Payden & Rygel team up with Metzler Bank
LOS ANGELES -- Payden & Rygel and Metzler Bank have created a joint venture that will bring U.S. mutual funds to European clients and European options to U.S. pension funds, according to Scott J. Weiner, president of Metzler/Payden, the joint venture.
Part of the drive to form the new company is to increase its visibility in Germany, which has started passing legislation nibbling at the country's Social Security-type system and planting the groundwork for a kind of 401(k) pension plan, Dr. Weiner said.
Payden & Rygel has $27.5 billion under management, most of which is invested in domestic fixed income, with about $1 billion in equities, Dr. Weiner said.
Optimism drops among U.K. execs
LONDON -- The global economic slowdown is causing a plunge in business confidence in the U.K. financial services industry, according to a survey by the Confederation of British Industry and PricewaterhouseCoopers.
Business confidence has dropped to an eight-year low. Sixty-two percent of the 186 companies surveyed between late August and early September were less optimistic than three months ago, while only 9% were more optimistic.
Out of 20 money managers surveyed, the fall in confidence was even sharper. Of those surveyed, 81% said confidence has fallen since the previous three months.
Allianz developing retail money management
MUNICH -- Allianz Aktiengesellschaft announced it will develop money management for retail clients as an additional core business. Diethart Breiphol, CFO of the insurer, said there is more money to invest, and national social security systems have reached their limit.
Separately, Allianz and Dresdner Bank announced they will pool their back-office operations in a new joint venture called ADAM Service GmbH, potentially saving each firm 10 million deutsche marks (U.S. $6 million). Both institutions have decided to keep their money management operations separate, disappointing observers who anticipated greater cooperation.
Putnam, NAMCO add to partnership
BOSTON -- Putnam and Nissay Asset Management, Tokyo, a subsidiary of Nippon Life Insurance, are deepening their partnership to serve institutional investors.
Putnam agreed to buy a 10% ownership position in NAMCO. The two companies are developing joint investment products to serve the investment trust management market, the Japanese equivalent of mutual funds.
Three more ITM funds will be launched by January, bringing the fund family to four. Both companies are preparing defined contribution-type programs for the anticipated liberalization of the Japanese retirement savings market.