Products September 22, 2011

Wanted: Investment Partners for Multi-Asset Class Portfolio

September 22, 2011 (PLANSPONSOR.com) - The California Public Employees’ Retirement System (CalPERS) is looking for some “external strategic partners”.
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The nation’s largest public pension system is seeking those partners to manage a multi-asset class portfolio and to “provide insights and analytics on asset allocation and portfolio construction decisions”.

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According to the announcement, CalPERS expects to retain two or three firms to manage a total of up to $2 billion in assets. The solicitation begins September 23, 2011, and ends on October 21, 2011.

“The external partners will have discretion to invest in and move assets across a range of investments in the CalPERS portfolio, within a risk framework,” said Farouki Majeed, CalPERS Senior Investment Officer, Asset Allocation and Risk Management. “The objectives of the strategic partnership are to generate excess returns and help us develop more dynamic asset allocation and risk-budgeting capabilities.”

CalPERS will seek managers based on a set of minimum qualifications and questions. Finalists will be selected using a scoring and ranking system.

Submitting Proposals

Investment managers can submit proposals through CalPERS Investment Proposal Tracking System.  For information on minimum qualifications, the solicitation process and how to submit a proposal, go to the Investment Proposals page at http://www.calpers.ca.gov/index.jsp?bc=/investments/investment-proposals.xml.  Click on the “MAC Partners” link in the “Special Instructions for Open Solicitation” in the right navigation bar.  Or you can just click http://www.calpers.ca.gov/eip-docs/investments/mac-invit-letter.pdf.

CalPERS is the nation’s largest public pension fund with approximately $224 billion in market assets. It administers retirement benefits for 1.6 million active and retired State, public school, and local public agency employees and their families and health benefits for more than 1.3 million members.  

Administration September 22, 2011

JPMorgan Sues American Century

September 22, 2011 (PLANSPONSOR.com) - JPMorgan Chase & Co. has sued American Century, claiming it wasn’t informed about an $848 million optioned share sale to Canadian Imperial Bank of Commerce (CIBC).

 

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According to Bloomberg news, a public version of the complaint filed in Delaware Chancery Court claims that American Century failed to disclose material information regarding the sale, which was completed a few weeks ago, and that the shares were not purchased at their fair market value.  The complaint was initially filed under seal, according to the report.

Earlier this summer CIBC had agreed to buy a 41% stake in American Century from JPMorgan, which had purchased a holding of about 45% in American Century for about $900 million in January 1998.  Under a 2009 option agreement between American and JPMorgan, American could purchase all of the shares JPMorgan owned in the firm and resell them to a third party.

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JPMorgan said in its complaint that it learned of the share sale through a public announcement. “American Century improperly withheld information regarding the CIBC stock sale from JPMorgan’s director designee on American Century’s board,” lawyers for the bank said in the redacted complaint, according to Bloomberg.  American Century “understated its financial position” to an independent adviser, causing a report that served as the basis for the share repurchase to understate the firm’s fair market value, according to the complaint.

JPMorgan is seeking a trial to determine unspecified damages.

American Century manages approximately $111 billion in assets for a diversified mix of institutional, intermediary and retail investor clients.  CIBC holds 10.1% of American Century’s voting rights and appoints two representatives to its 10-person board.

The case is JPMorgan Chase & Co. v. American Century Companies Inc., CA6875, Delaware Chancery Court (Wilmington.)  

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