Japan's Pension Fund Association, Tokyo, with 3.5 trillion yen ($28 billion) in assets, is considering investing in additional asset classes and strategies. Under consideration are: derivatives, which could be fixed-income or equity based, foreign or domestic; tactical asset allocation; and actively managed emerging markets equities.
Decisions about such investments - including the sizes of any allocations - are still a way off, said Noboru Terada, the PFA's executive director, pension investments. The fund still has to do ``extensive research'' into the new areas, so any movement into them would be at least a year away, Mr. Terada said.
A New Mexico lawmaker introduced a bill to create a portable retirement plan for state employees.
Under the bill, introduced by Republican State Rep. Kip W. Nicely, the state would set up a new defined contribution plan for state workers. Participants in the plan would have a one-year vesting period and would be allowed to take their assets with them when they change jobs. Participation in the state's defined benefit plan would not be required.
Officials of the $5.75 billion New Mexico Public Employees' Retirement Association, Santa Fe, oppose the legislation. If the bill passes, it will take a large chunk of money from the fund, said Burt Terrazas, executive deputy director for member services. Officials are lobbying for the bill to be part of a voter referendum, he said.
Beloit College, Beloit, Wis., dropped the Acorn Fund, managed by Wanger Asset Management, from its $77 million endowment fund. Trustees didn't like the fund's performance and decided to gradually move the $3 million small-cap equity portfolio to existing international equity manager Morgan Stanley, said John Nicholas, vice president of administration and treasurer. The firm's portfolio will increase to $9 million.
Cambridge assisted. Officials at Wanger did not return calls by press time.
Investment in U.S. office properties has nearly doubled over the past year with pricing increasing an average of 20% nationally, according to a report by Granite Partners, a real estate investment bank. Granite estimates total office investment was about $46 billion in 1997, for transactions greater than $10 million.
REITs were the largest acquirers of office buildings, accounting for about 48% of all individual transactions and 84% of portfolio transactions. Institutions and pension funds accounted for 17% of individual office transactions and 5% of portfolio transactions.
The median Canadian pension fund earned a return of 14.8% in 1997, four percentage points below 1996's return of 18.8%, according to data from SEI. Canadian active equity managers had a median return of 19.3%, 9.6 percentage points below the previous year's return; Canadian active bond managers had a median return of 9.7%, below 1996's return of 11.8%.
U.S. equity managers beat 1996's 21.8% return by 13.9 percentage points. Non-North American active managers' return was 11.1% in 1997, compared with 13.5% in 1996.
