BOSTON - Pathway Health Network and Beth Israel Health Association, both in Boston, might combine their endowment and other non-pension pooled funds, totaling $541 million and using 17 investment managers, if a merger between the two hospital organizations is completed.
The groups also might combine their pension funds, totaling $208 million, although the issue hasn't been explored yet.
Representatives from both organizations said the merger is imminent. They expect the two groups to tackle the combination of pooled and pension funds in several months after other financial issues pertaining to the merger are addressed. The groups haven't discussed whether to hire a consultant to advise them on combining the funds.
Pathway has $235 million in non-pension pool funds. New England Deaconess Hospital in Boston, the largest in the network, also has a defined benefit fund of $89 million and a 401(k) fund of $50 million. Figures for the other Pathway hospitals were unavailable.
Beth Israel has a defined benefit plan of $69 million and non-pension trust and pooled funds of $306 million. Beth Israel doesn't have a 401(k) plan. It uses 12 managers, which manage money for all of its funds. Their names were unavailable.
HAMILTON, BERMUDA - EXEL Ltd., an insurer in Hamilton, has acquired a 30% stake in Pareto Partners from its majority owner, Mellon Bank Corp., which also sold an additional 5% to Pareto's management. The transaction leaves Mellon with a 30% stake in Pareto and increases to 40% the interest held by the management's holding company, Palomar Management.
Besides bringing in additional capital, EXEL will make it possible for Pareto to offer guaranteed products to its clients, as well as managing EXEL's own assets, said Lynne Minard, director of marketing of Pareto.
The transaction is expected to close during the second quarter. Terms were not disclosed.
SAN FRANCISCO - The Bank of America has agreed to pay $4 million to two pension plans at Norcal Waste Systems Inc. as part of a settlement with the Department of Labor.
The settlement allows the Bank of America to continue as fiduciary to other ERISA plans, even though the original lawsuit sought to ban the bank. The payment will restore all losses by Norcal's pension plans in connection with their investment in Techno-Therm Inc.
According to its original lawsuit, the Labor Department said the bank, acting as the plans' trustee, allegedly lost $3.3 million in investing plan assets in Techno-Therm.
CHICAGO - The $1.3 billion Chicago Transit Authority Employees' Retirement System has entered into a joint venture with Commercial Net Lease Realty, a public real estate investment trust, to acquire net leased retail properties, confirmed Kevin Lynch, principal with The Townsend Group, Cleveland, which structured the deal.
The retirement system will invest $15 million in a limited liability company that will be 80% owned by the retirement system and 20% owned by Orlando, Fla.-based CNL, said Mr. Lynch. The total committed capital will be $18.75 million, with an additional $9.5 million borrowed from an institutional lender.
Mr. Lynch claims the partnership is the first of its type because the pension fund and REIT have committed to jointly acquire and own property. Past pension fund-REIT joint ventures were done with the intent of acquiring specified property portfolios, he said.
ALBANY, N.Y. - The $74 billion New York State & Local Retirement Systems, Albany, terminated Westmark Realty Advisors, Los Angeles, as a real estate manager, according to John Hull, deputy comptroller, investments.
Westmark was terminated when it failed to place in the top tier following an evaluation of the fund's equity real estate managers, Mr. Hull said. Westmark was hired in the late 1980s to buy and manage a portfolio of industrial properties in California, said Mr. Hull.
Richard Clotfelter, Westmark president, confirmed the relationship was terminated.
Equitable Real Estate Investment Management will take over the portfolio.
ATLANTA - The 11th U.S. Circuit Court of Appeals in Atlanta upheld a district court decision that awards participants in the Piggly Wiggly Southern Inc. pension plan more than $1 million in additional pension benefits because of inaccurate valuations of plan benefits.
The U.S. District Court for the Northern District of Alabama agreed in April 1995 with the Pension Benefit Guaranty Corp.'s finding that benefits for 2,500 current and former workers of the Piggly Wiggly supermarket chain were undervalued when the pension plan was terminated.
After the employee pension plan was terminated in 1988, the PBGC audited the plan. It found the employer had used inappropriate interest rates and had transferred $2.7 million in what the employer claimed were excess assets to its parent corporation, Bruno's Inc., Birmingham, Ala.
BOSTON - A sustained bull market for high-technology public stocks and the seemingly endless appetite for high-tech initial public offerings propelled venture capital returns to the highest levels seen in more than a decade, according to Venture Economics Information Services.
Preliminary results of a survey of venture capital partnerships reveal they returned 50.7% for the year ended Dec. 31, according to Venture Economics Information Services. Venture capital partnerships returned 16.2% during the same period a year earlier.
"While the final results are not due for several more weeks, with 80% of the survey complete - out of 700 funds - we can estimate that 1995 is definitely a record breaker with the average return for funds from seed funds to later-stage funds posting a 40% return," for the year, said Jesse Reyes, director. "Later-stage companies .... had an astounding 60.9% return for 1995," he said. "Returns haven't been in this range since the industry posted a 56% return for the year 1980."
WASHINGTON - Lawmakers need to consider the impact of shifting part of the Social Security trust funds into the private capital markets before drafting any legislation to fix the system, the American Academy of Actuaries suggested in reports presented this month to Congress.
Lawmakers already are studying various proposals to shore up Social Security by investing part of the trust funds' assets in the capital markets, or letting individuals set up individual accounts and invest that money in the markets themselves.
The group suggests lawmakers explore the possibility that a huge infusion of Social Security trust fund assets could dampen market returns, as well as whether workers should be allowed to tap into those accounts before retirement.
The actuaries' group also recommends examining whether the government might need to bail out older Americans who spend their savings in their individual accounts too fast.
FAIRFAX, Va. - Gary Lyons, former head of the corporate consulting division of Institutional Shareholder Services Inc., started a firm offering corporations help to determine whether their executive pay plans and corporate governance practices will pass muster with activist shareholders.
Mr. Lyons' Fairfax, Va.-based eponymous firm also will advise corporations on how to check the validity of analysis conducted by proxy advisory firms.
