GABELLI STAKES OUT PIONEER

Famed fund investor Mario Gabelli smells a bargain in Pioneer Group Inc., the Boston-based asset management company which has seen its stock tumble 13% this year. Gabelli Asset Management, a Rye, N.Y., firm with $13.7 billion in assets under management, took a 5% stake in Pioneer in June. In July, it increased its stake to 6.02%, according to documents filed with the Securities and Exchange Commission. Pioneer, which manages $22.7 billion, saw its shares plunge as much as 10% last week after disclosing that it lost $12.1 million in the second quarter because of deficits in its overseas timber, mining and banking operations. It also took a $5.9 million hit in its Russian banking group due to unauthorized financial transactions.

TIAA-CREF Sallies forth

Move over Sallie Mae. TIAA-CREF, the $213 billion pension fund system for college and university employees, is getting into the tuition financing business. Late last week, the New York-based organization announced that it has been selected to manage New York’s College Savings Program, which was created by the state legislature in September 1997. TIAA-CREF — which made its foray into the retail market earlier this year — is handling marketing, enrollment, administration and money management services. It also plans to make a bid for tuition financing plans in other states.

Barbash ending ‘great run’

The top U.S. mutual fund regulator says his five years on the job “has been a great run,” but he is returning to private law practice because “I decided it was the right time to be looking for newer challenges.” The reported tenfold increase in his approximately $125,000 salary won’t hurt either. Barry Barbash announced last week he will step down next month as director of the Securities and Exchange Commission’s Investment Management Division to become a partner at Shearman & Sterling in its Washington office. Mr. Barbash, 44, will develop the New York firm’s investment management practice, here and abroad. No word yet on who will succeed him, but likely candidates include three associate directors serving under him — Robert Plaze, Kenneth Berman and Douglas Scheidt.

Private bank going public

Offitbank Holdings Inc. has filed plans for an initial public offering to raise as much as $46 million. The New York private banking firm, which manages about $10 billion, is hoping to raise money for acquisitions internationally and in the United States. “Lots of private banking organizations are seeking to increase their services and a way of doing that is by raising capital,” says Ken Hoffman, president of Optima Group, a consulting firm in Fairfield, Conn. Offitbank netted $2.8 million in 1998’s first half — 73% above the 1997 period. Firm officials wouldn’t discuss the IPO.

Gee, GM, here comes GTE

For the first time since the breakup of AT&T in the early ’80s, $90.6 billion-asset GM will face competition for the title of largest U.S. corporate pension fund, reports InvestmentNews sister publication Pensions & Investments. The competitor? The combined $79 billion in employee benefit assets of GTE Corp. and Bell Atlantic Corp. Ironically, two-thirds comes from Bell operating companies that had been part of AT&T. The merger is expected to be complete within a year.

3 fund firms ban Wilshire

At least three mutual fund companies have banned Wilshire Asset Management from investing, reports Pensions & Investments. Officials at Strong Funds, Fremont Investment Advisers and a third firm that requested anonymity contend the Santa Monica, Calif., firm had been abusing the free exchange privileges by moving among funds in what appeared to be a market-timing strategy. Strong also has banned Summit Advisors Inc., owned by Wilshire chairman and CEO Dennis Tito, on grounds that it had pursued the same strategy. Wilshire Asset is owned by Wilshire Associates Inc., one of the nation’s largest pension fund consultants. Stephen L. Nesbitt, a senior vice president at Wilshire Associates, says the firm doesn’t want to “surprise them (mutual funds) with our strategy, and we prearrange it ahead of time with the fund family.” But officials of the three companies said they had no arrangement. Mr. Tito was out of the country and unavailable for comment.

Electronic trading may zap deal

The need for foreign expertise in electronic trading has snagged merger talks between Chicago’s futures exchanges, reports InvestmentNews sister publication Crain’s Chicago Business. Leaders of Eurex, the all-electronic German-Swiss futures market aligned with the Chicago Board of Trade, last week discussed a three-way alliance with leaders of that mart and of the Chicago Mercantile Exchange. But industry sources say Merc officials balked, convinced that their computer-based trading alliance with the Paris exchange Matif will cost far less and go on-line much sooner than Eurex. Likewise, the CBT is committed to approving a contract later this month with Eurex, a move that some say could scuttle any hope for a merger.

Merrill trust goes national

Merrill Lynch & Co. has expanded its $65 billion-asset trust services from eight states to all 50 — as well as to Puerto Rico, the U.S. Virgin Islands and the District of Columbia. It received a federal savings bank charter last year.