Metropolitan Life Insurance will acquire Bankers Trust's defined contribution record keeping, plan administrative operations and other participant services business, in an agreement reached today. Terms of the deal weren't disclosed.
Bankers Trust will continue to provide trustee and investment management services to the 401(k) marketplace.
Gary Lineberry, MetLife vice president, who has headed MetLife's defined contribution business, also will head the new, expanded organization, which will have $67 billion under administration. It will retain Bankers Trust employees, systems and infrastructure.
American National Red Cross, Falls Church, Va., might invest in an inflation or deflation hedge for its $800 million pension fund, said Kathleen Kavanagh, senior investment associate-treasury. The fund is studying the use of such a hedge and could decide in December on a course of action and begin a search afterward for managers. It could invest $4 million to $20 million.
The scope of the study includes considering what asset classes would be best to use for such a hedge.
District of Columbia Retirement Board trustees agreed to maintain the fund's 7.25% actuarial rate of return and its 5% expected increase in salaries and inflation.
Jorge Morales, acting executive director of the $4.5 billion pension fund, said the board could decide on a more aggressive rate of return once it has turned over the bulk of its assets and unfunded liability to the federal government in six to nine months.
Milliman & Robertson, the fund's actuarial consultant, recommended that the figures not change.
Stable value investment total sales increased by 35% during the first half of 1997, one of the largest jumps recorded by the industry, according to data released by the Stable Value Association and LIMRA International. Traditional insurance company general account GIC placements amounted to $13.5 billion in the first half of 1997, up 33%; synthetic GIC sales totaled, $11.5 billion, up 35%; and separate account GICs amounted to about $2.3 billion, up 133% for the period.
REITs are driving up property prices, but also are promoting market discipline, said Peter Korpacz, publisher of the Korpacz Real Estate Investor Survey. REITs are on a tear to buy property to bulk up their market capitalization to $1 billion, said Mr. Korpacz.
A REIT that hits $1 billion gets noticed by more analysts, large institutional investors and credit rating agencies, which could lead to a lower cost of capital. But if a REIT does a deal analysts don't like, the stock price will take a hit, he said.
Blairlogie Capital Management will introduce a commingled fund based on its ``EAFE select'' strategy, said Darren DeVore, chief marketing officer. The strategy creates a concentrated portfolio from the 10 industrialized country markets Blairlogie rates the most favorable. Blairlogie also offers the strategy for separate accounts, in EAFE and emerging markets versions.