MINORITY-OWNED HOLDING FIRM BUYS CISNEROS;LOS ANGELES CITY DROPS CURRENCY OVERLAY SEARCH;IOWA EMPLOYEES SEEKS THREE REALTY MANAGERS;NEW MONEY MANAGEMENT ACQUISITION FIRM LAUNCHED;FOUNDATION MULLS INVESTING IN EMERGING MARKETS;HARSCO CORP. BEGINS ASSET ALL
NEW YORK - First Capital Asset Management, a minority-owned holding company, reached an agreement to acquire all shares of Cisneros Asset Management, Houston, a minority-owned fixed-income manager with $760 million in assets. The amount of the all-cash transaction was not available.
Earlier, Smith, Graham & Co., another Houston minority-owned bond manager, had agreed with Cisneros' board of directors to acquire the firm. But that deal fell through when it was submitted for approval to Cisneros' shareholders. Cisneros will remain independent and separate from First Capital Advisers, FCAM's money management firm, said Valerian Butler-Smith, president of First Capital. Gilbert Garcia, Cisneros' president, will remain with the firm as a consultant for a 10-month period. Mr. Smith will be president of Cisneros until a replacement is found.
The deal is expected to close June 30. The bulk of Cisneros' assets will be transferred from its subadviser, Criterion Investment Management, to its new subadviser, U.S. Trust of Texas. Criterion's sale to Nicholas-Applegate Capital Management requires Criterion to sever outside subadvisory relationships.
Los Angeles City drops currency overlay search
LOS ANGELES - The $4.4 billion Los Angeles City Employees' Retirement System decided to drop its search for a currency overlay manager.
"Looking at the fund and the risk-return benefits and costs of currency overlay, we decided not to" pursue the search, said General Manager Oscar Peters.
He said the fund has "a couple of international managers who do hedging on their own portfolios" when market conditions warrant.
Iowa Employees seeks three realty managers
DES MOINES, Iowa - Trustees of the $7.2 billion Iowa Public Employees' Retirement System will begin a search for three real estate investment managers to invest a total of $110 million, said Chief Investment Officer Elizabeth Sanders. RFPs will be sent to selected firms. The fund is working with real estate consultant The Townsend GroupTownsend Group.
Two separate account managers will invest a total of $90 million in industrial buildings and apartments; $20 million will be allocated to a REIT securities manager. Assets will come from cash flow.
New money management acquisition firm launched
BOSTON - BancBoston Capital, a private equity subsidiary of Bank of Boston, set up Value Asset Management, a money management holding company to acquire stakes in midsized money managers.
Value Asset Management will acquire minority positions and majority ownership in privately owned firms with assets between $500 million and $10 billion. It will offer the firms support functions including sales, marketing and back-office operations.
Value Asset will be headed by Christopher Kelley, formerly president of C.K. Advisory Group, Value Asset's predecessor. BancBoston purchased the assets of C.K. Advisory for $10 million.
Foundation mulls investing in emerging markets
PRINCETON, N.J. - The approximately $4.2 billion Robert Wood Johnson Foundation is considering investing in emerging markets. The possibility is still in the early stages of consideration and has not yet been taken up by the finance committee, said communications officer Paul Tarini.
The finance committee's next meeting is in July, but the meeting's agenda has not yet been set.
S.C. Johnson seeks managers for 3 investments
RACINE, Wis. - The $265 million S.C. Johnson & Son Inc. defined benefit fund is searching for managers in three new asset classes, said R.A. Poetker, trust administration manager.
It plans to allocate $40 million to non-U.S. equities. The fund also plans to allocate $20 million to domestic mid capitalization stocks and $10 million to domestic small-cap stocks. J.H. Ellwood & Associates is assisting the searches, which the fund hopes to complete by the end of the year. Funding will come from cash and reallocating among existing managers. None of which will be dropped.
Harsco Corp. begins asset allocation study
CAMP HILL, Pa. - The $160 million Harsco Corp. defined benefit pension plan is undertaking its first major asset allocation study in some years, said Robert G. Yocum, director-treasury operations. He said the study, which the staff is doing without a consultant, has just gotten under way.
Beyond investment allocations, the group hasn't decided the other issues the study will consider, such as whether to review its custodial bank relationship.
He expects the study to be completed by the end of the year.
Evangelical Lutheran execs may be sued over policies
ST. PAUL, Minn. - Current and former trustees of the Evangelical Lutheran Church in America Board of Pensions, and members of the Church Council, will be named personally responsible for breach of fiduciary responsibility in a class-action law suit to be filed in the next few weeks, warned the Pension Defense Fund, a group of church clerics and lay workers unhappy with ELCA's investment policies.
The suit will accuse the defendants of fraud and breach of fiduciary duty with respect to the ELCA's alleged South Africa divestment policies. It will seek $100 million in punitive damages and $227 million in estimated investment losses.
Bonnie L. Fleming, counsel for the ELCA from the Minneapolis law firm Faegre & Benson, said "many of the allegations about this matter made by this group are flat-out misrepresentations or misstatements of the facts. We will deal with any lawsuits when and if they come."