Trustees of the $16.1 billion Virginia Retirement Systems approved a new asset allocation study that hikes global equity assets to 70% from 58.7%, mostly in international.
Global fixed income drops to 21% from 31.5%. Real estate increases to 9% of assets from 6.8%. Private equity and other alternative investments increase to 15% from 6.8%.
The board is discussing a range of alternative investments such as hedge funds, and plans an increase in private equity investing, said spokesman Bill Sullivan.
The new asset allocation increases international equity investments to 20% - including 5% for a new emerging markets allocation - from 8%. Domestic equity drops slightly; the biggest drop is in domestic large cap.
The SEC could propose by the end of the year a rule requiring mutual funds to improve disclosures of their investments in derivative securities, Commissioner Richard Y. Roberts said at a conference in New York.
The proposal likely would include asking bond funds to use a rating scale to inform investors of the riskiness of investing in their fund. Until then, Mr. Roberts suggested mutual funds voluntarily give shareholders better information in prospectuses about their investments in derivative securities.
Employers are more than twice as likely to have added a retirement plan within the past five years than to have dropped one, according to a new survey by KPMG Peat Marwick.
Of the 993 large employers surveyed, 89% offered a retirement plan in 1994, compared with 78% of those surveyed last year. Even among those companies that dropped a plan, 53% did so because they substituted a plan with another, or merged plans. The survey also noted 70% of employees receiving retirement benefits are covered by traditional pension plans, even though only 34% of employers with retirement benefits offer such defined benefit plans. The more widespread 401(k) retirement plans - offered by 56% of employers surveyed - cover about 57% of employees.
The $3.3 billion Pennsylvania State Employes' Retirement System hired three additional international equities managers for a total new allocation of $535 million. BEA Associates and Templeton Investment Counsel will each manage $200 million in a broad allocation. Seligman Henderson will run $135 million in small-cap international.
The new allocations bring the fund close to its 10% investment target for international equities.
Trustees for the $644 million Firemen's Annuity & Benefit Fund of Chicago shuffled managers and equity allocations, according to board meeting minutes.
Bank of America Investment Advisors was hired to run $26 million in core equity; Institutional Capital, $29 million in large-cap value; and Chancellor Capital Management, $25 million in large-cap growth.
Assets came from Dreman Value Management, which was terminated. Additional unstated assets from Dreman were placed in a fixed-income portfolio managed by incumbent Stein Roe & Farnham, according to minutes.
Also, American National Bank's core equity allocation was dropped to about $23 million from its previous $84 million, and Chicago Asset Management had its large-cap value allocation cut to about $29 million, from an unstated amount.
William S. Stack was named CIO for international equity and portfolio manager for core domestic equity at RCM Capital Management. The position is a new one at RCM, which is focusing on increasing its international investments.
Mr. Stack previously was CIO at Lexington Management. Robert DeMichele, chairman at Lexington, has taken over the responsibilities of CIO for now.
The $3.1 billion New Mexico Public Employees' Retirement Association, Santa Fe, hired Capital Guardian Trust to manage a $300 million international equity portfolio. Jeffrey W. States, director-finance, said the portfolio will be funded from cash flow over an extended period and represents the fund's first international exposure. Wilshire Associates assisted.
The nearly $60 billion New York State & Local Retirement System, Albany, allocated $12.5 million to Apodaca-Johnston Capital for small-cap growth equities. The hiring is part of the fund's continuing search for emerging managers. Washington Hackett handled the search for Apodaca-Johnston.
The $6 billion Louisiana Teachers Retirement System, Baton Rouge, cut to three from five its roster of international equity managers. The fund had selected Bank of Ireland, Smith Barney, WorldInvest, Putnam and Scudder Stevens & Clark, but was unable to reach agreement on fees with Putnam and Bank of Ireland, said Jennifer Netterville, investment officer. Their allocations, $100 million and $200 million, respectively, will be divided among the other three.
The approximately $3 billion Oklahoma Teachers' Retirement System, Oklahoma City, expects in October or November to expand Neuberger & Berman's bond mandate to global from domestic now. Neuberger & Berman manages $265 million for the fund, but the allocation might increase slightly when the conversion is made.
The approximately $350 million Ohio State Highway Patrol Retirement System hired MacKay-Shields Financial for a $50 million value stock portfolio, and Ark Asset Management, $50 million in growth stocks, a fund official said. DeMarche assisted.
Adding its second international manager, the $106 million Carle Foundation fund, Urbana, Ill., hired Wells Fargo Investment Advisors to run an MSCI-EAFE index fund, said Orin Ireland, vice president-administration and chief financial officer. The amount hasn't been determined; it may come gradually from cash flow, or more quickly from a rebalancing among all existing managers. The fund is doing a general rebalancing study.
First Busey Trust assisted.
Bucyrus-Erie Co., South Milwaukee, Wis., replaced the co-manager of an equity option for its $35 million 401(k) plan, said Jerrold M. Thorne, director-benefits and compensation. The plan added Fidelity's Contrafund and dropped Bank One's Helmsman small-cap stock growth mutual fund. It retained the existing co-manager, Bank One's Helmsman disciplined equity mutual fund. Both co-managers run half of the $3 million equity option. Allbright & Hart assisted.
The $104 million Willamette University endowment hired Putnam Institutional Management and Templeton Worldwide, each to manage $2.5 million in active international equity portfolios.
The $30 million defined contribution plan of Hitachi America Ltd., Tarrytown, N.Y., chose Twentieth Century Services to provide bundled record-keeping services and six of eight investment options. Also selected were Bankers Trust Co. Capital Preservation Trust and Wells Fargo Equity Index.