CalPERS Picks Money Ace
The California Public Employees’ Retirement System on Wednesday tapped an East Coast investment industry veteran with a small timber farm in Maine as its new chief investment officer, the Sacramento Bee reported. Russell Read, former deputy investment chief for Deutsche Asset Management in New York, will join the nation’s largest public pension fund on June 1. He replaces Mark Anson, the fund’s highly regarded CIO who left in January to head London-based Hermes Pensions Management Ltd. CalPERS manages investments of more than $132 billion in U.S. and international stocks, $53 billion in fixed income, $9 billion in real estate, about $11 billion in private equity and $3 billion in cash. Read will earn a base salary of $534,000 a year, plus bonuses up to 75 percent of his pay if certain investment targets are met.
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CalPERS Finds 6 Companies Come Up Short
Pressing for greater shareholder access to the corporate boardroom, the California Public Employees’ Retirement System on Wednesday targeted six U.S. companies for performance that lagged against their peers, the Sacramento Bee reported. Most of these companies have excessive takeover defenses that make it nearly impossible for shareowners to change bylaws or reject poison pill tactics that dilute stock value, a CalPERS official said. This year, CalPERS raised the red flag on Brocade Communications Systems, Cardinal Health Inc., Clear Channel Communications Inc., Mellon Financial Corp., OfficeMax Inc. and Sovereign Bancorp Inc. Cardinal, Sovereign, Mellon, OfficeMax and Brocade, for example require a 67 percent to 80 percent vote of approval by shareholders before they can enact changes. A number of company officials reacted swiftly Wednesday, saying that their companies have been addressing issues raised by the $207 billion fund.
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FCC Launches Payola Probes of 4 Radio Giants
The Federal Communications Commission on Wednesday launched formal investigations into pay-for-play practices at four of the nation’s largest radio corporations, the Los Angeles Times reported, the biggest federal inquiry into radio bribery since the congressional payola hearings of 1960. Two FCC officials with direct knowledge of the matter confirmed that the agency had requested documents from Clear Channel Communications Inc., CBS Radio Inc., Entercom Communications Corp. and Citadel Broadcasting Corp. over allegations that radio programmers had received cash, checks, clothing and other gifts in exchange for playing certain songs without revealing the deals to listeners, a violation of federal rules. The four broadcasters have been negotiating with the FCC for weeks to forestall a federal inquiry by offering to discontinue certain practices and pay limited fines. But those talks stalled last month over the issue of how much the broadcasters should pay.
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Adelphia Unplugged?
Infighting among creditors of distressed Adelphia Communications could scuttle the bankrupt cabler’s sale to Time Warner — a possibility that has some on Wall Street applauding, Variety reported. The $16.9 billion purchase, which would be TW’s biggest move since its merger with AOL, has been pending for more than a year and has a July 31 deadline. Time Warner and partner Comcast could bail then. Seeds of doubt about the deal closing have been planted by warring factions of bondholders in Adelphia’s miserable four-year-long bankruptcy proceedings. Who gets what in a Chapter 11 restructuring is a zero-sum game. Senior debt holders get paid back in full. Plain shareholders basically get zippo: But there’s a whole middle group of bondholders ockeying for position over the rest of the dough. Creditors will vote on the plan in May or June, but one large contingent, in an angry letter to Adelphia’s board this week, swore to reject it.
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A Lofty Goal Realized in NoHo
This weekend, the DT Group’s lofty ambitions will be realized, the Los Angeles Daily News reported. As the Studio City-based developer likes to say, “SOHO is coming to NOHO” with what is considered the first industrial building conversion into residential lofts in the San Fernando Valley. The company has turned the old Adolph’s Meat Tenderizer testing facility into 68 units, each with its own personality, and this weekend is hosting an open house at the complex. Initially the company will rent them with rents ranging from $1,100 to $3,000 a month — but prospective tenants have expressed interest in owning. Plans call for an eventual conversion to condominiums.
