IPL Energy Inc., Calgary, Alberta, might consolidate investment managers in three subsidiaries' pension plans. Together they have more than U.S.$620 million in total assets, said Arif Sayeed, manager-pension fund investments. A decision could be made by the end of the year. Ideas on how to consolidate are under study.
Consumers Gas Co., North York, Ontario, has C$600 million (U.S.$432 million) in pension assets. Its managers are: Brinson and Sceptre Investment, for non-Canadian stocks; State Street Global, emerging market stocks; Baker Gilmore and J.R. Senecal, Canadian bonds; and Knight Bain Seath & Holbrook and Laketon Investment, Canadian equities.
Interprovincial Pipe Line Inc., Edmonton, Alberta, has C$150 million (U.S.$108 million) in pension assets. Managers are: Nicholas-Applegate and Alliance Capital, U.S. equities; Putnam, non-North American stocks; Altamira, Canadian bonds; and Jones Heward and Cassels Blaikie, Canadian equities.
IPL USA Inc., Duluth, Minn., has U.S.$80 million in pension assets run by Putnam for non-U.S. stocks, Nicholas Applegate for U.S. stocks and Alliance for U.S. stocks and bonds.
Cambridge (Mass.) Retirement Sytem is adding high-yield bonds to its asset mix. By the end of March, the $325 million system hopes to hire a manager to run $13 million.
``We took a look at their current portfolio and they have no exposure to this, and they should,'' said Alison Ellsworth, the Segal Advisors consultant who is assisting. RFPs will be sent out tomorrow; the deadline is Nov. 14. Funding will come from cash.
Segal Advisors' universe of multiemployer pension funds posted a median combined investment return of 10.6% for the first six months of 1997, vs. 11.7% for a composite market index-based benchmark.
In the first half, the universe's median equity return was 17.6%, below the S&P 500's 20.6% return. For the same period, funds in the universe had a median 3% return in fixed income, vs. 3.1% for the Lehman Aggregate index.
Bay Area Painters & Tapers Pension Fund Trust, San Francisco, is conducting an asset allocation study. CFO Alex Lawrence wasn't sure what changes might be implemented as a result of the study.
The in-house review is expected to be finished by January. According to Nelson's Directory of Plan Sponsors, the $300 million fund invests 52% in U.S. equity, 33% U.S. bonds, 10% real estate equity and 5% in cash. Americans nearing retirement might be better off financially than previously believed, according to a study by the Pension Research Council at the University of Pennsylvania's Wharton School.
Pensions, Social Security and retiree health insurance account for 60% of the wealth anticipated by the median household in a survey of income and wealth for Americans between 51 and 62 in 1992, the latest data available. Median wealth for people in their mid-50s totaled about $340,000.
``Nevertheless the evidence shows that many people enter retirement with inadequate assets, and half of older Americans depend heavily on Social Security,'' said Olivia Mitchell, one of the study's authors.
Prudential Real Estate Investors and Developers Diversified Realty, a public REIT, formed the Retail Value Investment Program, which will invest in shopping centers that need repositioning. The venture will be funded with $210 million from PREI's pension fund investors; DDR has made a $70 million commitment. The venture was put together by Chadwick, Saylor, a real estate investment bank.
Frank Russell expanded its mutual fund services to Australia, where it now offers its series of multistyle, multimanager mutual funds to retail investors and small to midsized superannuation funds. The funds are available to institutional investors through Russell Implemented Consulting, part of Russell's consulting services practice. Retail investors can access the funds through the financial planning network of ANZ, an Australian bank.
The American Stock Exchange today began trading warrants tied to the performance of oil futures contracts. The warrants are Commodity-Indexed Preferred Securities linked to the J.P. Morgan Commodity Index Crude Oil Total Return Index, and are priced with a $25 face amount. They pay a 2.5% dividend, with a redemption payment set for Oct. 16, 2000.