Schroders PLC's acquisition of the remaining 50% voting interest in Wertheim Schroder & Co. Inc.'s stock would give the London-based firm responsibility for more than $85 billion in assets. Schroders manages some 53 billion ($81.6 billion), while Wertheim runs nearly $3.7 billion in assets.
Both asset management units are expected to remain separate, but officials are exploring working together on a global fixed-income product.
Tony Coelho, president and chief executive officer of Wertheim Schroder Investment Services Inc., said the merger will enable it to offer Schroder's international products to its U.S. client base.
Schroders agreed to acquire the voting stock held by Wertheim management for about $68 million. In addition, it will offer $24 million for non-voting shares in the company held by three institutional investors, which total 15% of the company's capitalization.
The acquisition values Wertheim Schroder at about $310 million, including the assumption of debt.
The International Brotherhood of Teamsters is calling for labor and public pension funds to boycott using Merrill Lynch as a money manager because of a variety of ethical and fiduciary concerns, including its promotion of derivatives, said Bart Naylor, national coordinator for office of corporate affairs at the union.
The labor union also is asking state and local government agencies to blacklist the Wall Street firm as an underwriter for bond offerings to finance public projects because of alleged financial improprieties in snagging those deals.
In response to the Teamsters' call, Minnesota Treasurer Michael A. McGrath has asked Howard Bicker, executive director of the state Board of Investment, to cancel all dealings with the firm.
The $14 billion Los Angeles County Retirement Association proposes the county give the fund $1.97 billion from an offering of pension obligation bonds. It also wants the county to guarantee medical subsidy payments to retired participants in the county fund. In exchange, the fund would give the county $265 million cash from surplus earnings, said Simon Russin, a trustee.
The proposal is aimed at helping the county, which is strapped for cash, meet its budget obligations while allowing the retirement system to become fully funded.
The proposal is contingent upon county supervisors accepting the offer and floating pension obligation bonds that would virtually fully fund the retirement system. If a deal is struck, the fund would temporarily place the $1.97 billion in indexed accounts.
A federal district judge in Boston has dismissed a lawsuit by Lens Inc. against Stone & Webster and its ESOP trustee, Chase Manhattan Bank.
Lens was trying to force the company's management to make clearer financial disclosures to investors. Lens alleged the company misled investors on its profitability, but the judge said Lens failed to prove that and failed to show how the company's disclosures would hurt investors.
Lens' next step will be to file a shareholder proposal against the company in the 1995 proxy season, seeking to examine the company's financial records or asking for an independent outside evaluation of a sale of assets, said Nell Minow, principal.
Trustees for the $48 billion California State Teachers' Retirement System, Sacramento, rescinded the limited delegation of authority of its staff to invest in alternative investment partnerships without trustee approval.
The decision to rescind that authority came up at a one-year review. It will be reviewed again in a year.
Some trustees said they gain knowledge about the alternative investment market and specific alternative investments when they review the proposed investment themselves.
The $400 million endowment of Grinnell College, Grinnell, Iowa, hired Warburg Pincus Counsellors as its first international equity manager, said David S. Clay, treasurer.
The fund allocated $3 million to Warburg's institutional international equity mutual fund, Mr. Clay said. No consultant was used.
Assets for the new hire came from cash flow.
Mr. Clay said he didn't know if this assignment may lead to other international allocations.
'Raiding' stopped in Illinois
A bill expected to be signed into law any day by Illinois Gov. Jim Edgar protects the state's pension funds from being raided, said state Sen. Karen Hasara.
The bill changes the status of state pension payments to that of non-discretionary, continuing contributions, removing them from the process of budget negotiation.
"We think it's great," said Thomas Zimmerman, chief investment officer for the Illinois Teachers' Retirement System.
The legislation requires the state to make steadily increasing contributions over 15 years. After 15 years, the state pension contribution will remain static until the 50th year, when the state's five pension systems will be funded at 90%, rather than at the current 50%.
The new status prevents the diversion of pension payments to other purposes by state legislators and the governor.
The $33 million pension fund of Elizabethtown Water Co., Westfield, N.J., hired Atalanta/Sosnoff and MacKay-Shields to each manage one-third of the pension fund in balanced portfolios, said Gail Brady, Elizabethtown's vice president of finance.
U.S. Trust of New Jersey, formerly the sole manager, was retained to manage the remaining third of the portfolio.
The $12 billion Illinois Teachers' Retirement System, Springfield, gave an additional $15 million to farm team equity manager MPI Investment Management, said Thomas Zimmerman, chief investment officer.
MPI began managing $5 million about a year or so ago.
The $170 million defined benefit plan of the Carpenters District Council of Kansas City (Mo.) and Vicinity hired Putnam to manage $20 million in equities and Columbia Management to manage $10 million in equities. Segal Advisors was consultant.