Fund exec to lose job
James Ward, executive director of the $6.1 billion Public School Teachers' Pension and Retirement Fund of Chicago, will not be offered a new contract, said Mary Sharon-Reilly, president of the board of trustees. Mr. Ward's contract expires Aug. 31, 1997.
Ms. Sharon-Reilly declined to say why the board would not renew the contract. Mr. Ward also said he had no comment. Assistant Executive Director Mike Nehf will succeed Mr. Ward in September 1997, she said.
Also, trustees hired three domestic fixed-income managers, Mr. Nehf said.
Miller Anderson & Sherrerd will receive $150 million. Of that, $100 million will come from reducing a fixed-income portfolio managed Morgan Stanley Asset Management, its sister company; the remainder, from the fund's new allocation to fixed income.
Trustees also hired Bank of America and Wellington Management to manage yet-to-be-determined amounts, 50% each of the new money allocated to fixed income, he said.
CalSTRS eyes REIT trades
The board of the $60 billion California State Teachers' Retirement System tentatively hired Aldrich Eastman Waltch to evaluate CalSTRS' real estate portfolio for recommendations on properties that could be traded into public REITs. The recommendations must receive board approval before trades can be made. The hiring is subject to contract negotiations. CalSTRS identified ABKB/LaSalle Securities as the other finalist.
Strong settles DOL action
Strong Capital Management settled with the Labor Department over 1,598 cross trades involving pension clients that were made by the firm's predecessor, Strong/Cornelieuson, between 1987 and 1989. The Department of Labor filed a complaint alleging the cross trades were made without the direction of the employee benefit plans involved and without adequate representation to the plan sponsors; such cross trades violate ERISA, the department said.
Strong agreed to reimburse certain existing and former pension clients a total of $5.9 million. Strong did not identify the clients. The settlement means Strong neither admitted nor denied the allegations. The company said it would not engage in further cross trading.
California mulls DC plan
The California Assembly approved a bill that would create a new defined contribution plan for the state's public employees.
The bill goes to the state Senate for approval June 24. Mike D'Arelli, chief pension consultant to the Assembly, said only four more votes are needed in the Senate to assure its passage.
Labor associations oppose the proposal, as do the boards of the California Public Employees' Retirement System and the California State Teachers' Retirement System.
The bill would give state agencies, municipalities, school districts and other public entities the ability to offer a defined contribution plan along with existing defined benefit plans.
Employees would have the option of remaining with the DB plan or transferring assets to the DC plan.
Vauxhall hires NatWest
The 600 million ($930 million) Vauxhall Motors Ltd. common investment fund hired NatWest Investment Management to run a 85 million ($132 million) passive U.K. equities portfolio that tracks the FTSE-350 index. The common investment fund includes assets from four Vauxhall pension plans.
The portfolio previously was managed by State Street Global Advisors, said Des MacIntyre, manager of pension investment analysis.
Promus taps AmEx
Promus Hotel Corp. hired American Express to provide bundled services for its $40 million 401(k) plan, a Promus official said.
Five American Express mutual funds are offered as investment options along with company stock. Daily valued record keeping, trust and administration and employee communications education are included.
Promus handled monthly valued record keeping internally, using a system from SEI. Funds from Delaware Investment, State Street Bank, Vanguard, Western Asset Management and Dreyfus had been offered before.
Shift to active eyed
The $5.2 billion Ohio School Employees' Retirement System is considering shifting 40% of its international indexed equities into active management with two new managers, said Paul M. Kubinsky, director of investments. The move will be considered at the June 21 board meeting.
The fund has $500 million in international stocks, of which $200 million would be moved into active management.
PanAgora goes to Canada
PanAgora Asset Management hired Royal Trust of Canada as trustee and custodian for a new series of pooled funds to be marketed to tax-exempt institutions in Canada. PanAgora will market the funds to pension funds, endowments, foundations and provincial government agencies.
Patrick O'Hearn, Canadian market manager, said the funds will help PanAgora compete with State Street Global Advisors and BZW Barclays Global Investors Canada.
KPERS suit dismissed
A $65 million lawsuit filed by the Kansas Public Employees' Retirement System was dismissed in U.S. District Court last week. In a summary judgment, U.S. District Judge D. Brook Bartlett said the statute of limitations had run out on the suit, filed in 1991 against five firms and about a dozen individuals in connection with its loss of $65 million in a loan to Home Savings Association of Kansas City, Mo., now insolvent.
A clerk in Judge Bartlett's office said suits against all defendants, except accounting firm Peat Marwick, were dismissed.
The Kansas Supreme Court, though, agreed to decide what KPERS' statute of limitations is, said Robert Coleman, the lead attorney representing KPERS.
IPO for Van Kampen?
Van Kampen American Capital's holding company filed a registration statement with the SEC, paving the way for a possible initial public offering of approximately $250 million. The majority of shares are held by Clayton Dubilier & Rice, a private equity firm.
Some sources view the registration as a tactic to speed up negotiations with potential purchasers of Van Kampen, said to be either Morgan Stanley or McGraw-Hill.
Equities may increase
Trustees of the $37 billion Ohio Public Employees' Retirement System may increase the fund's exposure to equities to 35% of assets, said Joel S. Buck, investment officer.
The fund now has 26% of assets in domestic equities, and a small portion in international stocks.
An asset allocation study by Wilshire Associates, due next month, is expected to recommend the increased stock exposure. The money would come from cash, he said.
The fund manages all of its domestic equity allocation in-house.
Stake bought in AMI
TD Asset Management, a money management subsidiary of Toronto-Dominion Bank with C$13.5 billion (U.S. $9.9 billion) in assets, reached an agreement to acquire a 30% stake in AMI Partners, which has C$7.5 billion (U.S. $5.5 billion) in assets. Terms were not disclosed. TD Asset will absorb the quantitative capital and private capital divisions of AMI. AMI's institutional advisory and active asset management businesses will remain independent of TD Asset.
Fund considers change
The $75.8 billion New York State and Local Retirement Systems is considering a small hike in its allocation to passive small-cap and midcap domestic stocks, a spokeswoman said. The move had been recommended in an asset allocation study by Mercer. The fund has just under half its assets in domestic stocks, of which 9% is in small- and midcap indexed stocks; officials will decide whether to raise the allocation to 10% by the end of summer, the spokeswoman said.
Restrictions eased
Restrictions on the use of external managers have been loosened at the $43 billion State of Wisconsin Investment Board. The state Legislature raised the limit allowed to be managed externally to 15% of assets from 10%.
Patricia Lipton, executive director, said the loosened restrictions give the board more flexibility in managing assets, but there are no plans to increase the number of external managers.
Ms. Lipton said executive searches for an internal auditor and an internal international fixed-income portfolio manager are under way.
Tobacco stocks under fire
New Jersey state Assemblywoman Shirley K. Turner introduced a bill that would prohibit the Division of Investment from investing in stocks or bonds of cigarette makers and distributors.
The division would have up to three years to sell all securities in tobacco-related manufacturers.
Norfolk hires M&G
The 750 million ($1.16 billion) Norfolk County Council Superannuation Fund, Norwich, England, hired M&G Investment Management to run a 120 million ($186 million) U.K. active equities brief, said Brian Wigg, manager-loans and investment.
Midland Securities Services was picked as custodian for M&G's portfolio.
Assets came from reducing the allocation to Gartmore Pension Fund Managers, Mr. Wigg said. Now, Gartmore will run about 100 million in U.K. stocks plus roughly 150 million in overseas equities.
Hymans Robertson assisted in the equity manager search.
Laketon drops subadvisers
Laketon Investment Management added a global equity team that will assume portfolio management responsibilities from subadvisers Scudder, Stevens and Clark and Davis Hamilton Jackson. The team - Peter Walter, Lance H. Speck and Mary Throop - will join Laketon later this month from Canada Life Investment Management. Scudder had subadvised international equities and Davis Hamilton, U.S. equities.
Benchmark could change
The approximately $23.5 billion Oregon Public Employes' Retirement System, Salem, has begun reviewing the benchmark it uses for measuring the performance of its $4.3 billion in international equities.
The fund uses the MSCI EAFE index, but "there is a general belief that EAFE is not the best benchmark," said Jay Fewel, senior equities investment officer.
The fund is "discussing moving away from EAFE to another benchmark that is more representative of the international marketplace in its entirety," Mr. Fewel added.
He said fund officials expect to come up with a recommendation by the end of the month.
Heitman names CEO
Charles Wurtzebach was named CEO of Heitman Capital Management (formerly Heitman/JMB Advisory). He succeeds Stephen Perlmutter and Jerry Claeys, who will continue as co-chairmen and will be responsible for the firm's separate account relationships.
Mr. Wurtzebach had been president and chief operating officer of the real estate adviser.
MFS names VP
David A. Adiseshan was named vice president-Australasia operations of MFS Asset Management, based in Sydney, a new position.
He formerly was marketing manager of SBC Australia Funds Management. He will focus on new business development in Australia, New Zealand and Southeast Asia, where MFS plans to launch a series of unit trusts to cater to small and medium-sized superannuation plans.
