Friday, March 27, 2015

POSTED: Thursday, March 26, 2015, 4:51 PM

The Joint Hearing on Medical Marijuana (yes, they called it that) at Pennsylvania Hospital on Tuesday attracted 20 state legislators and leaders of the Health and Judiciary committees. That's 1/10 of the state House of Representatives. The majority were from the ruling Republicans.

Most of the elected officials who spoke -- the people's reps -- said they are inclined to favor pot legalization because they have constituents who say pot has helped them, or hope it would. 

Against them, doctors who lead U.S. and Pennsylvania medical societies -- the men of science -- said they oppose state reps' sweeping proposals to let people try to medicate many painful conditions with marijuana, because there is so little measurable proof the weed is good, and not bad, for humans, even for sick people.

POSTED: Thursday, March 26, 2015, 4:31 PM

Philadelphia International Advisors, a 13-year-old, $1.7 billion-asset Center City-based investment firm for pension plans and other large investors, will close at the end of June, Joe Langella, director of managed accounts, confirmed to me in an email.

The shutdown "is related to the decision by Founder and President Andrew Williams to retire for health reasons," according to Pensions & Investments magazine's daily online-subscriber edition, citing the City of Sarasota Firefighters' Pension Board, which was informed of the shutdown earlier this week.

PIA managed $3 billion when Williams and his colleagues separated from Glenmede Trust to form PIA in 2002. PIA's quantitative investor group has moved to Segall Bryant & Hamill Investment Counsel, a Chicago firm.  

POSTED: Wednesday, March 25, 2015, 3:54 PM

Billionaire activist Nelson Peltz today named four allies of DuPont Co. chairman-CEO Ellen Kullman he wants eliminated from the Wilmington bio/chemical/materials company by himself and three allies in a scheduled May 13 contested board election:

- Alexander M. Cutler, CEO of power-equipment manufacturer Eaton, and DuPont's lead director. He's also a leader of the Business Roundtable, a corporate lobby group, and a director of KeyCorp, one of the natoin's biggest banks.
- Robert A. Brown, President of Boston University, a formre chemical engineering prof at MIT
- Lois D. Juliber, retired vice chairman and Chief Technology Officer at Colgate-Palmolive. A past director of Goldman Sachs, which has been advising DuPont in its defense against Trian's attempted takeover, Juliber was, ironically, nominated to the Kraft Board of Directors by Peltz's Trian Fund Management (corrected) in a 2007 takeover bid that has resulted in the sale or shutdown of former Kraft plants, including the one in Northeast Philadelphia. But now Trian wants her out at DuPont.
- Lee M. Thomas, retired CEO of lumber giant Rayonier. He also headed the EPA under President Ronald Reagan.

To replace these directors on DuPont's 12-member board and boost cash flow to shareholders more rapidly than he thinks Kullman is able or willing to do, Peltz and Trian: nominate; himself, a veteran activist shareholder who has targeted a series of U.S. companies (including Kraft and H.J. Heinz, which now plan to merge) for cost-cutting, asset sales and reorganization to boost investor profits; John H. Myers, ex-chief executive of GE Asset Management; Arthur B. Winkeblack, ex-CFO of H.J. Heinz; and Robert J. Zatta, acting CEO at Princeton-based chemical maker Rockwood Holdings Inc.

POSTED: Wednesday, March 25, 2015, 3:34 PM

(Updated, with comments from NewSpring's Skip Maner in Paragraph 3): NewSpring Capital, Radnor, says today it acquired Seattle-based X5 Solutions, in the first of a series of deals designed to build a national network of voice, data, and Internet services for business clients. X5 offers SIP (Sessions International Protocol) trunking to combine multiple cloud-based information streams in a single user interface.

NewSpring has hired the team of Greg Forrest and Rick Hirsh to run X5, add products and build a national network. Hirsch previously headed Transcend United Technologies, a Wayne telecom firm sold to Dallas-based ACG Networks, where Forrest worked, in 2013. NewSpring has invested more than $1 billion in clients' money, mostly in East Coast tech companies, through a team headed by founder Michael DiPiano.

NewSpring general partner Skip Maner, who will work closely with X5, adds this: "Connectivity and communications for middle market clients are increasingly complex. Further, customers in the middle market don’t have great providers to help them solve these problems. Amazon and Comcast and other providers service the small end of the market. Verizon, L3, CenturyLink and others serve the higher end of the market. The middle market (which we define as companies with 25-2500 communications end points) has been abandoned. X5 is a solutions provider that provides complex service solutions to  customers so they can ensure that their connectivity needs (voice, data, cloud) are met -- because downtime is not an option.""

POSTED: Wednesday, March 25, 2015, 1:13 PM
Artist's rendering of new high-rise apartment tower to be built at 709 Chestnut Street.

Mack-Cali Corp., a real estate company best known for North Jersey offices, says its Roseland apartment division will seek city approval to build 300 apartments in a new 32-story tower in the vacant lot at 709 Chestnut St., near Independence Hall, in partnership with the site landowner, the Zuritsky family's Parkway Corp., with construction expected to start by the end of 2015.

Mack-Cali in 2013 said it was shifting its Philadelphia-area focus from its aging suburban offices to apartments and mixed-use development, reflecting both the region's flat office rents, and also growing higher-end residential demand in Center City and other transit-friendly neighborhoods.

In a statement Wednesday, CEO Mitchell E. Hersh called the proposed 709 Chestnut tower, on a block best known for restaurants (like Jose Garces' Rosa Blanca down the block, or Stephen Starr's Jones across the street), "a cornerstone of the burgeoning Market Street East neighborhood, which is quickly emerging as a dynamic cultural destination in a previously underutilized corridor.” He expects to draw young "millennial" tenants as well as older "empty nesters."

POSTED: Tuesday, March 24, 2015, 4:25 PM

UPDATE: New Jersey state pension officials say they are worried the state will lose money if it has to fire money managers who are also political donors, writes the Inquirer's Andrew Seidman here. The state pension system reported investment returns of 7.25% in fiscal 2014, just below its 7.28% annual target: see P. 21. Corrected.

[NJ returns last year fell below those of Pennsylvania's largest pension fund, the Pa. School Employees' Retirement System (PSERS, which returned 8.8%) and the Montgomery County pension plan (invested mostly in Vanguard index funds, Montco returned 7.8%), though N.J. did manage to beat the Pa. state workers (SERS) plan, which returned 6.4%. Those three Pennsylvania funds all set a 7.5% annual performance target.]

EARLIER: "The administration of Gov. Chris Christie is considering investing tens of millions of dollars of New Jersey pension money in a firm whose chairman was among the largest donors to the Christie-run Republican Governors Association (RGA)," writes David Sirota in International Business Times here. (See links in Sirota story to earlier examples of Christie donors hired to help run N.J.'s underfunded pension system.)

POSTED: Tuesday, March 24, 2015, 12:29 PM

Writes Richard Henderson in the Financial Times' newsletter: "The Nevada Public Employees’ Retirement System (NPERS) has cut a combined $6 billion in mandates from five managers as it adopts a completely passive portfolio for its tradable securities." Nevada, with $35 billion under management, "axed a trio of $800 million active fixed income strategies managed by J.P. Morgan Asset Management, Western Asset Management and Dodge & Cox," FundFire reported, citing Nevada's contracted chief investment officer, Ken Lambert (whose day job is at Peavine Capital). .

The ex-active bond buyers' accounts "will largely move to UBS Global Asset Management, which will manage $4.9 billion in passive fixed income, up from $1.9 billion, and Payden & Rygel, which will manage a similar amount after managing $1.8 billion previously." Their performance will be weighed vs. Barclays Capital U.S. Treasuries Index, instead of the previous Capital Aggregate Bond Index. Nevada has also taken $1.8 billion from two of its passive managers, BlackRock and Mellon Capital Management, and spread it among other passive managers (BlackRock and Mellon still run billions in passive Nevada money.) 

"The changes mean the plan’s 90% allocations to stocks and bonds are now completely passive. The fund's remaining 10% is held in private equity and real estate," much like the switch Pennsylvania's Montgomery County has made. "This shift comes as more institutions are turning to passive products to save money while enjoying solid returns, pushing up total assets held in passive strategies in recent years.

POSTED: Monday, March 23, 2015, 1:28 PM

When anyone (like DreamIt-backed, latest-big-thing Meerkat, or Twitter's newly-acquired Periscope) can produce and distribute smartphone video, pushing it out free to vast audiences, what does that do to Comcast and Verizon and HBO, TV networks and pay video providers and advertisers?

"It's good buzz, but it's incremental," says Jeff Dittus, chairman of Audience Partners, a 62-person electronic ad platform with offices in Fort Washington and Washington that specializes in targeting voters for political campaigns. "The big thing coming down the road is four-screen accessibility," the art of pumping messages, not just through TV, but also through "computers, mobile phones, tablets, and gaming systems," he told me.

Video live-streaming services like Meerkat may prove well-suited for reaching people in their 20s raised on smartphones, he added.  But reaching the mass of Americans now means surrounding them on all screens. And  advertisers, retailers, pro sports, video makers, and the operatives organizing the 2016 Presidential campaigns are already hard at work making it happen. (More in my column in today's Philadelphia Inquirer here)

About this blog

PhillyDeals posts raw drafts and updates of Joseph N. DiStefano's columns and stories about Philly-area finance, investment, commercial real estate, tech, hiring and public spending, which he's been writing since 1989, mostly for the Philadelphia Inquirer.

DiStefano studied economics, history and a little engineering at Penn, taught writing at St. Joe's, and has written the book Comcasted, more than a thousand columns, and thousands of articles, and raised six children with his wife, who is a saint.

Reach Joseph N. at or 215 854 5194.

Joseph N. DiStefano
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