Pensions & Investments back issues from July 2008:
Diversification bogey.(Viewpoint)(Viewpoint essay)
Jul 07, 2008 ... Tiger Woods offers a lesson for pension funds and other large institutional investors dealing with the turmoil of the market and the economy. His absence from golf at least for the rest of the year as he recovers from knee surgery will mean lower network television ratings for ...
LETTERS TO THE EDITOR.(Other Views)(Letter to the editor)
Jul 07, 2008 ... In support of marking to market As one of the "number of actuaries'' supporting disclosure of market value of liabilities for public pension plans, I would like to add my voice to that of Jeremy Gold and many others ("Public funds fight to keep status quo,'' page 6, June 23, ...
Corrections/clarifications.(Correction notice)
Jul 07, 2008 ... The credit on the photo of Barton Biggs on page 3 of the June 23 issue was ...
Diversification puzzle; Experts believe institutions are more flexible in making allocations, but question their understanding of the true risk of the investments.(P&I Roundtable: The Credit Crisis)(Discussion)
Jul 07, 2008 ... The credit crisis has roiled stock and bond markets since last summer, but it has also created some extraordinary investment opportunities. However, experts at a June 9 round table held by Pensions & Investments questioned whether many institutions are capable of exploiting ...
Swedish funds hope rules to change soon; Shift could lead to billions in new mandates.(Alternatives)
Jul 07, 2008; ... Byline: Thao Hua STOCKHOLM - A government review of investment restrictions affecting the four major AP funds in Sweden is injecting new optimism into fund executives' lengthy campaign to allow for more alternative investments at the expense of listed equities and bonds. ...
Pequot CIO: Executive compensation to drop; PAY ADJUSTMENT.(Frontlines)
Jul 07, 2008 ... Byline: Doug Halonen At least one hedge fund manager is expecting a pay cut in the future, one he believes other executives richly deserve to take as well. "I'm ready for it,'' said Byron R. Wien, chief investment officer at Pequot Capital Management Inc., Westport, ...
PanAgora executives resign; Changes in culture prompt old guard to leave, but CEO isn't worried.(Money Management)
Jul 07, 2008 ... Byline: Douglas Appell BOSTON - A trio of senior executives left PanAgora Asset Management Inc. in recent months, with some observers of the quantitative money manager citing changes in the firm's culture as one reason for the departures. The most high-profile exit ...
Prescient experts saw gloom on horizon; P&I round table predicts any improvement in credit markets still a long way off.(Investing)
Jul 07, 2008 ... Byline: John D'Antona Jr. The credit crunch is far from over, a Pensions & Investments round table of investment experts predicted a month ago. To date, their warnings largely are coming true. A mostly gloomy panel warned there will be further carnage in both ...
SEC asks Delaware court for proxy ruling.(Governance)(Securities and Exchange Commission)
Jul 07, 2008; ... Byline: Barry B. Burr WASHINGTON - The SEC has asked the Delaware Supreme Court for the first time to rule whether corporations should pay the cost of a campaign of a minority slate of directors and whether such an issue is a proper subject of a shareholder proposal ...
Funds caught in crossfire over energy; Legislative efforts to give consumers relief on high gas, food prices remain at fever pitch.(Washington)
Jul 07, 2008; ... Byline: Doug Halonen WASHINGTON - Federal lawmakers are struggling to find a way to slash soaring energy and food prices for consumers - and that's raising a serious threat to pension fund investment discretion. "They (lawmakers) are desperate to do something,'' said ...
FSA's new website targets young investors; FINANCIAL LESSON.(Frontlines)(Financial Services Authority)(http://www.what aboutmoney.info)(Brief article)
Jul 07, 2008; ... Byline: Thao Hua Britain's Financial Services Authority is going through cyberspace to teach young people about money matters. A new website, http://www.what aboutmoney.info, is among the first government-sponsored Internet hubs of its kind to specifically target ...
Brokerage-sector stocks get bruised; Goldman Sachs goes into bear mode after seeing limited prospects for quick turnaround.(Trading)
Jul 07, 2008 ... Byline: Isabelle Clary NEW YORK - U.S. brokerage stocks pushed deep into bear territory after Goldman, Sachs & Co. analysts downgraded the sector June 26 to "neutral'' from "attractive'' in the absence of a supportive outlook. "We are lowering our coverage view on ...
Funds preparing to do more with fewer firms; Investors to use fewer managers for real estate investing.(Real Estate)
Jul 07, 2008; ... Byline: Arleen Jacobius Some large real estate investors are taking a second look at their rosters of investment managers with a view to focusing on a smaller number of players. The current state of the economy and the real estate market might be forcing some ...
OSU lures Hook away from Baylor; NEW CIO.(Frontlines)(Ohio State University)(Jonathan D. Hook)(chief investment officer)(Brief article)
Jul 07, 2008; ... Byline: Christine Williamson Veteran endowment manager Jonathan D. Hook will become Ohio State University's first chief investment officer Aug. 1. He also will hold the title of vice president and will assume oversight of $2.2 billion of long-term investments, including $1.5 ...
Legg Mason view dims after bailout; Rescue of money market funds has analysts rethinking when firm will be healthy again.(Money Management)
Jul 07, 2008 ... Byline: Douglas Appell BALTIMORE - Legg Mason Inc.'s latest round of support for its money market funds has prompted analysts to push back their predictions for when the struggling giant might regain its footing, with some seeing the move as an ill omen for other fixed-income ...
Evaluating the ratings.(Viewpoint)(Viewpoint essay)
Jul 07, 2008; ... Byline: Barry B. Burr A new academic study - "Rating the Ratings: How Good Are Corporate Governance Ratings'' - is generally critical of RiskMetrics Group Inc., GovernanceMetrics International Inc., The Corporate Library LLC and Audit Integrity Inc. The criticism of the firms ...
An artful turnaround.(Viewpoint)(Viewpoint essay)(Brief article)
Jul 07, 2008 ... We have no Monet to buy Degas to make the Van Gogh. That might have been a lament of the Art Institute of Chicago seven years ago, when it became infamous for allocating 87% of its then $667 million endowment fund to hedge funds and then losing $43 million with a failed hedge ...
Directors and better accounting.(Other Views)(speech)(Speech)
Jul 07, 2008 ... An excerpt from a speech by Christopher Cox, chairman of the Securities and Exchange Commission, addressing the Stanford Law School Directors' College on June 23: I'd like to talk about making (corporate) disclosure more useful for all of you, as directors who are ...
Attempt to row across Atlantic founders early; SINKING HOPES.(Frontlines)(Brief article)
Jul 07, 2008; ... Byline: Thao Hua A team of four men attempting the first unassisted, trans-Atlantic crossing by rowing from New York to England abandoned their journey June 13, when their boat capsized east of Cape Cod. The Scilly Boys - Chris Jenkins, Tim Garratt, Joby Newton and ...
A new mantra to simplify the maze of DC plans.(Other Views)(defined contribution)
Jul 07, 2008; ... Byline: Scott B. David Employers, plan providers, employees and government officials all need to think differently about the challenges of meeting multiple goals for savings, health care and retirement. Employers and employees face a complexity in the sheer variety of ...
CalSTRS poised to shift $15 billion; U.S., foreign equity portfolios would be under 1 benchmark.(Pension Funds)(California State Teachers' Retirement System )
Jul 07, 2008; ... Byline: Raquel Pichardo SACRAMENTO, Calif. - CalSTRS could move some $15 billion to overseas equities from domestic stocks if its investment committee approves a proposal to combine the fund's U.S. and non-U.S. equity portfolios into one giant $102.7 billion portfolio and ...
SOUTH CAROLINA PLAN PARTNERS WITH GSAM.(Hirings)(contract between South Carolina Retirement System Investment Commission and Goldman Sachs Asset Management )(Brief article)
Jul 07, 2008 ... COLUMBIA, S.C. - South Carolina Retirement System Investment Commission hired Goldman Sachs Asset Management to handle $1.5 billion in a strategic partnership, according to a news release from the commission. Of the total, $1 billion will be invested in Goldman Sachs funds and ...
Canada needs third pension option, Ambachtsheer says; TIME TO BULK UP.(Frontlines)(Brief article)
Jul 07, 2008; ... Byline: Drew Carter A third pension "pillar'' is needed to prevent millions of Canadians from lower living standards in retirement, according to Keith Ambachtsheer, director of the Rotman International Centre for Pension Management at the University of Toronto. In a ...
Union says advisory opinion nothing new; AFL-CIO contends chamber thrown a 'political bone'.(Washington)(American Federation of Labor and Congress of Industrial Organizations)
Jul 07, 2008; ... Byline: Doug Halonen WASHINGTON - U.S. Chamber of Commerce officials are proclaiming at least a partial victory in their efforts to prevent organized labor from using pension fund assets to promote union goals. The Washington-based chamber had requested a letter from ...
Boeing drops DB plan for new workers.(News)
Jul 07, 2008 ... CHICAGO - Boeing Co. will close its defined benefit plan to non-union employees hired after Dec. 31, putting them in a new defined contribution plan. The change will allow Boeing "to better manage our retirement plan expenses and reduce financial risk,'' Rick Stephens, senior vice ...
At deadline.
Jul 07, 2008 ... Senators want PBGC probe Thirteen senators - including Barack Obama and Hillary Clinton - asked the GAO to investigate how the PBGC calculates benefits for the corporate plans it takes over. In a July 1 letter to the Government Accountability Office, the bipartisan ...
Olympic glow already fading; Equity boost for Games in China undone by market bubble.(Investing)
Jul 07, 2008; ... Byline: John D'Antona Jr. BEIJING - The Beijing Olympics start in a month, but for the Chinese stock market, the event is nearly over. "The Olympics have provided a mild boost historically in terms of stock prices, and China was no exception. But then things fall ...
DC PLAN FUTURE IS BACK TO THE PAST; Custom funds, annuity products spur changes.(Defined Contribution)
Jul 07, 2008; ... Byline: Jenna Gottlieb The business of providing services to defined contribution plans will return to its roots, with investment-only providers and insurers poised to recapture market share. When 401(k) plans first were introduced in the early 1980s, business flowed ...
Investors moving to next generation; Institutions with experience now prepared to go further in alternatives investments.(Alternatives)
Jul 07, 2008; ... Byline: Arleen Jacobius Sophisticated institutional investors continue to look for the new, new thing. Investors already experienced with the traditional alternatives - private equity, real estate and hedge funds - are now open to newer alternatives such as real ...
Banking rule change could create frenzy; Private equity, hedge funds likely to boost bank holdings if Fed revises regulations.(Alternatives)
Jul 07, 2008; ... Byline: Arleen Jacobius Private equity and hedge funds could have a field day if the Federal Reserve revises rules to make it easier for them to invest in banks. If the Fed allows private equity firms and hedge funds - using asset pools set aside for longer duration ...
Driven to succeed; Whether steering retirement services for New York Life or behind the wheel of a race car, Don Salama loves to compete.(Face to Face Don Salama)(Interview)
Jul 07, 2008; ... Byline: JENNA GOTTLIEB When not leading the retirement services group at New York Life Retirement Plan Services, Westwood, Mass., Don Salama is embarking on his second career as a professional race car driver. In 2004, Mr. Salama joined Turner Motorsport, a professional racing ...
Eugene Sit dead at 69; Cancer claims founder of Minneapolis-based investment firm.(Money Management)(Obituary)
Jul 07, 2008; ... Byline: Christine Williamson MINNEAPOLIS - Eugene C. Sit, founder of Sit Investment Associates Inc., died June 24 from pancreatic cancer. He was 69. Mr. Sit most recently served as chairman, chief executive officer and global chief investment officer of Sit ...
Hirings.
Jul 07, 2008 ... AP7 STOCKHOLM - AP Fonden 7 hired UBS Global Asset Management and Goldman Sachs Asset Management to each run a European "pure alpha'' equity portfolio with a notional value of about 2 billion Swedish kronor ($334 million) each, said Richard Folcker, acting head of fund ...
Changes ahead.
Jul 07, 2008 ... Indiana Public Employees' Retirement Fund, Indianapolis, is conducting searches for a hedge fund consultant and a real estate consultant, its first in those areas, said Jeffrey D. Hutson, director of communications. The RFPs are available at http://www.in.gov/perf. The deadline for each ...
Pickens thanks university to tune of $400 million; ONE COWBOY'S CHARITY.(Frontlines)(T. Boone Pickens )(Brief article)
Jul 07, 2008; ... Byline: Christine Williamson Every college should be so lucky as to have educated an oilman-turned-hedge fund manager. Oklahoma State University has about $400 million worth of reasons to be thankful that T. Boone Pickens graduated from its geology program in 1951, ...
No slowdown for commodities; Competition kicks in to snare asset managers with right expertise.(Investing)
Jul 07, 2008; ... Byline: Christine Williamson Institutional investors are shrugging off disquiet on Capitol Hill about their commodity investments and adding to their billions already invested in the controversial asset class. Meanwhile, Beltway politicians fret over ways to control ...
Complaints put CalPERS trade policy on hold.(News)(California. Public Employees' Retirement System)(Brief article)
Jul 07, 2008 ... SACRAMENTO, Calif. - CalPERS suspended its employee trading restrictions after less than three months, amid complaints from staff at the $240.7 billion system. "I want to thank everyone for providing us with comments, questions and concerns about the policy,'' interim Chief ...
Credit ills make bank loans more attractive; Short-term fling or long-term romance, some experts ask.(Money Management)
Jul 21, 2008; ... Byline: Douglas Appell A growing number of U.S. pension plans are making first-time allocations to bank loan strategies, lured by unusually attractive valuations resulting from the credit market turmoil of the past year. Market participants, while agreeing the trend ...
Bond specialists see opportunity in the tumult; Dealing with Fannie/Freddie fallout.(News)
Jul 21, 2008; ... Byline: John D'Antona Jr. Money managers are buying Fannie Mae and Freddie Mac mortgage-backed securities because they believe the market has overreacted to the agencies' financial woes. While the agencies' stocks have taken a beating, managers uniformly say the ...
CalSTRS celebrates 95 years; HAPPY BIRTHDAY.(Frontlines)(California State Teachers' Retirement System)(Brief article)
Jul 21, 2008; ... Byline: Raquel Pichardo Six years before Einstein's Theory of Relativity was confirmed by the Royal Astronomical Society and the Royal Society of London and 14 years before Charles Lindbergh flew the first solo trans-Atlantic flight, CalSTRS was born. The $164 ...
Court rules cash balance plans not age-biased.(Pension Funds)
Jul 21, 2008; ... Byline: Jerry Geisel NEW YORK - Joining three other federal appellate courts, the 2nd U.S. Circuit Court of Appeals ruled July 9 that cash balance pension plans do not violate federal age-discrimination law. In a unanimous decision, the New York-based appeals court ...
Oil futures market needs intervention; Concerted shorting of contracts would cool speculation frenzy.(Other Views)
Jul 21, 2008 ... Byline: Hilda Ochoa-Brillembourg The time has come for governments to consider intervening in the oil futures markets to reduce the effect of speculative demand, which may be exacerbating the rise in oil and other commodity prices. Whether we like it or not, from time ...
Alternatives.(briefs)
Jul 21, 2008 ... Venture-cap fundraising on rise in 2nd quarter NEW YORK - Venture capital funds raised $9.1 billion in 71 funds in the second quarter, up from $7 billion in 70 funds in the first quarter, according to data released by the National Venture Capital Association and Thomson Reuters ....
Commodities bill moves closer to vote in Senate.(Washington)
Jul 21, 2008; ... Byline: Doug Halonen WASHINGTON - Legislation that would restrict the ability of institutional investors to invest in energy commodities is expected to be voted on the Senate floor as early as this week, driven by edgy lawmakers eager to cut gasoline prices for their ...
AEGON begins key restructuring; Global integration of asset management essential for company's success, experts say.(International)(dialogue with Alex Wynaendts)(Interview)
Jul 21, 2008; ... Byline: Thao Hua THE HAGUE, Netherlands - AEGON NV, the Netherlands' second-largest insurer, is integrating its global asset management expertise - a move some consultants and analysts say was long overdue. The newly created AEGON Asset Management, The Hague, is part ...
Newest British manager is a prince of a guy; ROYAL ASSIST.(Frontlines)(Brief article)
Jul 21, 2008; ... Byline: Thao Hua Prince Charles is hoping to extend his eco-friendly message to the asset management industry by helping to launch a real estate fund that invests in sustainable projects. The fund aims to raise about [pounds sterling]1 billion ($2 billion) to ...
Chemical merger to combine $25.6 billion.(Pension Funds)(between Dow Chemical Co. and Rohm and Haas Co. )
Jul 21, 2008; ... Byline: Barry B. Burr MIDLAND, Mich. - Dow Chemical Co.'s planned $18.8 billion acquisition of Rohm and Haas Co. would bring together two overfunded defined benefit plans totaling a combined $17.9 billion in assets and defined contribution assets totaling $7.7 billion, with ...
GLOBAL PIONEER TEMPLETON DIES.(News)(John Templeton)(Obituary)(Brief article)
Jul 21, 2008 ... NASSAU, Bahamas - John Templeton, a pioneer in global investment management and in the mutual fund industry, died of pneumonia July 8 at a hospital in Nassau, confirmed Pamela Thompson, spokeswoman at the John Templeton Foundation. He was 95. Mr. Templeton founded the John ...
At deadline.
Jul 21, 2008 ... Northrop grounds plan Northrop Grumman no longer is offering its $22.9 billion cash balance plan to new employees. Instead, they will be enrolled in an existing defined contribution plan with a new matching contribution, according to a company employee benefits ...
Flight from risk aids indexers; Concern over quant performance among reasons for popularity.(Money Management)
Jul 21, 2008; ... Byline: Raquel Pichardo Index managers are seeing a renewed interest in passive equity and bond strategies from corporate and public pension funds as investors either move to take risk off the table or reallocate their risk to other asset classes. "I am seeing ...
Smallest sponsors feel neglected by providers.(Defined Contribution)
Jul 21, 2008; ... Byline: Lisa Shidler CHICAGO - While three-quarters of defined contribution plan sponsors of all sizes are satisfied with their provider's performance in terms of relationship management, executives at smaller plans are less satisfied than are those at larger employers, ...
Report: U.K. managers must adapt; Consolidation, innovation and outsourcing among recommendations in Fitch report.(International)
Jul 21, 2008; ... Byline: Thao Hua LONDON - Further consolidation, product innovation and increased outsourcing in the [pounds sterling]3.8 trillion ($7.6 trillion) U.K. asset management industry are keys to survival as managers cope with increasing competition and challenging market conditions, ...
Selling investors short.(Editorial)
Jul 21, 2008 ... The Securities and Exchange Commission order, issued July 15, temporarily banning so-called naked short-selling in the stocks of Fannie Mae, Freddie Mac and 17 major investment and commercial banks, is grounded in a fear similar to that surrounding oil: that institutional investors buying ...
Russell feeling stress overseas; Changes in marketplace, subpar returns are hurting giant manager of managers.(Money Management)
Jul 21, 2008 ... Byline: Thao Hua LONDON - Russell Investments, one of the most successful multimanagers in building a global business, is facing a series of setbacks on the international front - including persistent performance issues, according to consultants and clients. The ...
Institutions stick to hedge-fund guns; Lousy first half isn't deterring first-time investors or those adding to allocations.(Alternatives)(Statistical data)
Jul 21, 2008; ... Byline: Christine Williamson Despite the worst first-half hedge fund performance since records began and a 75% reduction in overall net investment, institutional investors are not only holding firm, but are planning to increase their allocations. Net flows into hedge ...
BlackRock, BNY Mellon asset gainers in Q2.(Money Management)
Jul 21, 2008 ... BlackRock Inc., New York, on July 17 reported $1.43 trillion in assets under management for the second quarter, up 5% from the first quarter and up 16% from the previous year. Management fees in the second quarter were $1.2 billion, up 4% from the first quarter and 24% a year earlier. ...
Shorting ban won't hurt too much, say money managers; Dealing with Fannie/Freddie fallout.(News)
Jul 21, 2008; ... Byline: Douglas Appell Managers of fast-growing strategies that employ shorting, such as 130/30 and market-neutral, say temporary new regulatory restraints on short-selling should affect their business only marginally - as long as the SEC's decree targeting 19 financial stocks ...
Corrections/clarifications.(Correction notice)
Jul 21, 2008 ... * SEI Investments Co. managed $64 billion in U.S. institutional tax-exempt assets in multimanager portfolios as of Dec. 31. Data for SEI cited in a June 23 story had included assets run by LSV Asset Management, in which SEI owns a 43% stake. Also, SEI managed $129 billion in worldwide ...
Dems' venue change Invesco's gain; KA-CHING!(Frontlines)(Brief article)
Jul 21, 2008; ... Byline: Drew Carter When it comes to Barack Obama, it really seems to be all about change. And this time Invesco is cashing in. In a move not seen since John F. Kennedy's acceptance speech in 1960, the Democratic National Convention organizers switched the venue ...
Limits could leave multifamily, rental housing out in cold.(Real Estate)
Jul 21, 2008; ... Byline: Arleen Jacobius Any rescue scenario that restricts Fannie Mae and Freddie Mac's lending abilities could have dire consequences for a little-noticed area in the current turmoil: multifamily and rental housing. Investors worry that nationalization or added ...
Index wars: What is infrastructure? Including utilities, private projects are issues in the debate.(Alternatives)
Jul 21, 2008 ... Byline: Arleen Jacobius Dow Jones & Co., New York, and Brookfield Asset Management Inc., Toronto, formed the latest partnership to create what the two hope will be the infrastructure benchmark, adding to the debate over what is infrastructure. Standard & Poor's and ...
Focused growth; 31% jump in asset allocation funds drives double-digit increase in defined contribution assets.(DC Managers)(Statistical data)
Jul 21, 2008; ... Byline: JENNA GOTTLIEB Assets in target-date funds fueled defined contribution plan growth with total DC assets climbing 12.6% to $3.708 trillion as of Dec. 31 from $3.292 trillion a year earlier. Internally managed assets rose 11.7% in the same time period, to ...
DOL issues reprieve on new 5500 forms; Labor's guidance also eases required reporting of service providers' expenses.(Regulation)(Department of Labor)
Jul 21, 2008; ... Byline: Doug Halonen WASHINGTON - Defined contribution plans and service providers won welcome relief from the Department of Labor on new fee and compensation reporting requirements. The reporting rules apply to annual 5500 forms for plan years that begin on or after ...
News briefs.(Mark D. Lay founder of MDL Capital Management was jailed for fraud)(Los Angeles County Employees Retirement Association conducts invitation-only search )(contract between California Public Employees' Retirement System and Ridgeway Partners)
Jul 21, 2008 ... CalSTRS moves on global equity, infrastructure SACRAMENTO, Calif. - CalSTRS' investment committee has given the go-ahead to combine the system's U.S. and non-U.S. equity investments into a $102 billion global equity portfolio and to create a new $1 billion to $2 billion ...
Arizona fund picks Underwood to run domestic stocks.(People)
Jul 21, 2008 ... Arizona fund picks Underwood to run domestic stocks Dave Underwood was named portfolio manager in U.S. equities at the $27 billion Arizona State Retirement System, Phoenix, said Paul Matson, executive director. He replaced Mike Viteri, who was named equity portfolio ...