WASHINGTON - Medlantic Healthcare Group, Washington, restructured its pension fund and corporate investment portfolio, with $100 million each in assets.
Exposure to equities will be increased, and stocks will be diversified to smooth out returns over time, said John Miller, director of corporate treasury.
The company now has all of its equities in large-capitalization stocks.
The company plans on increasing equity exposure to 70% of assets within 18 months from the current 60%, targeting 25% to large-cap domestic stocks, 20% to domestic small-cap stocks and 25% to international stocks. Fixed-income exposure will be cut to 30% from 40%.
As the first step, the health care company slashed large-cap stock exposure to 35% of assets, added 15% in small-cap stocks and 10% in international stocks.
Two large-cap managers, Aronson + Partners and Alliance Capital Management L.P. were hired; J.P. Morgan Investment Management Inc. was dropped, not for performance but simply because "we had too many large-cap managers," Mr. Miller said.
Aronson will run $18 million for the pension fund and $18 million in corporate cash; Alliance will manage $15 million for each fund.
The company also hired Columbia Partners as a small-cap manager to invest $15 million in pension assets and $13 million in corporate assets; Rowe Price-Fleming International Inc. will run $10 million in pension cash and $10 million in corporate cash in international stocks.
Pacific Investment Management Co. will run $78 million in fixed income - $36 million in pension assets and $42 million in corporate money. ASB Capital Management Inc., which managed the same amount in fixed income, was terminated, Mr. Miller said.