Business Briefs

Reported by Star-Bulletin staff & wire

Monday, October 11, 1999

Airlines match Continental's hike

CHICAGO -- Northwest Airlines Corp. joined other major U.S. carriers in raising leisure fares on U.S. flights after Continental Airlines Inc. increased prices because of higher jet-fuel costs. Northwest and others matched Continental's $20 increase on round-trip flights of more than 500 miles and $10 on flights less than 500 miles. Most of the increases applied only to leisure tickets, which are bought at least seven days before travel. The major airlines began jockeying for advantage after Continental raised its fares Friday.

Global Crossing expands in Britain

LONDON -- Global Crossing Ltd. is buying Racal Telecom, operator of a fiber-optic network in Britain, for about $1.6 billion from Racal Electronics Plc. The acquisition announced today is the latest in a series of major deals for Bermuda-based Global Crossing, which has been building undersea and land-based fiber-optic networks to link different continents and countries.

Bermuda-based Global Crossing will pay $1.57 billion in cash and assume Racal Telecom lease obligations worth $82.5 million. The deal still must be approved by Racal shareholders and regulatory authorities. Based at Bracknell, west of London, Racal Telecom operates fiber-optic telecommunications links between 2,000 cities in the United Kingdom.

In other news . . .

EMERYVILLE, Calif. -- Ask Jeeves Inc. said Microsoft Corp. agreed to expand use of the Internet search service to help users find answers on the software maker's customer-support Web site. Ask Jeeves shares rose as much as 35 percent.

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Of Mutual Concern

News for mutual fund investors

Fidelity plans to extend online trading time

BOSTON -- The nation's biggest mutual fund firm is extending its retail trading hours, allowing online investors to buy and sell securities long after the market's closing bell.

Boston-based Fidelity Investments will extend hours for online trading from 11:30 a.m. to 3 p.m. (Hawaii time), starting early next month. The move comes just days after Charles Schwab, one of Fidelity's biggest competitors in the discount online brokerage industry, announced similar plans. Taken together, the two announcements represent a significant increase in the potential number of after-hours traders. Fidelity will allow investors to place limit orders -- to buy stocks at or below a set price -- for Nasdaq securities, and for a limited number of New York Stock Exchange securities. Clients must buy minimum round lots of 100 shares.

PPM America to unveil third 'distress' fund

NEW YORK -- PPM America Inc. plans to set up a third fund totaling as much as $600 million to invest in financially troubled U.S. companies early next year, said Bradley Scher, who helps manage $874 million of debt at the firm.

PPM, the North American subsidiary of Prudential Corp. Plc, Britain's largest insurance company and institutional investor, manages two funds which invest in debt of bankrupt and financially strapped companies. These investments, known as CBOs, or collateralized bond obligations, bundle distressed bonds, loans and other credits to produce returns over time. PPM is among a handful of investment firms attracted to bonds and bank debt of distressed companies, which are often sold at discounts to face value, because these investments can be profitable in the long term after companies are reorganized. Last year, PPM's distressed funds returned 18 percent, leading performance in a group of similar funds, according to a report by Cambridge Associates Inc.

Tiger limits number of chances to withdraw

NEW YORK -- Tiger Management LLC, the hedge fund manager led by Julian Robertson, is limiting investors' ability to withdraw money after seeing billions pulled this year because of dismal performance. Robertson wrote to Tiger funds shareholders that they'll be able to redeem money just twice a year starting March 31, as opposed to four times a year. The move comes after Tiger's assets under management declined to $8 billion, from about $14 billion at the start of the year. Investments in the Tiger funds decreased 23.1 percent in value in the first nine months of this year.

New aggressive fund places 85% in stocks

BOSTON -- Fidelity Investments has added a fourth Asset Manager group fund that strives for bigger returns by putting more of its assets, about 85 percent, in stocks.

"The Asset Manager funds have been popular over the years with retirement investors, and investors are asking for a more aggressive offering," Robert L. Reynolds, president of Fidelity Investments Institutional Retirement Group said in a statement. The new fund, called Fidelity Asset Manager: Aggressive, seeks to have 85 percent of its assets in stocks and 15 percent in bonds or money market instruments, Fidelity spokesman Vincent Loporchio said.

Fidelity Asset Manager: Growth, whose assets were $5.19 billion as of Aug. 31, aims for 70 percent in stocks. The more moderate Fidelity Asset Manager, with assets of $12.4 billion, has about 50 percent in stocks. Fidelity Asset Manager: Income, the group's most conservative fund, aims for 20 percent in stocks. Its assets under management total $918 million.

U.S. fund firm crosses Atlantic for investments

LONDON -- Cross Atlantic Technology Fund said it's raising as much as $200 million to invest in young technology companies looking to expand across the Atlantic. The Radnor, Pa.-based fund will invest between $2 million and $7 million in companies based in the United Kingdom, Ireland or the United States seeking to boost business outside their home markets, said Sheryl Daniels-Young, managing director of the fund's U.K. unit. About half will be invested in the United States and half in Europe.

Cross Atlantic is the latest fund seeking to invest in European technology companies. Earlier this month, TL Lee, Putnam Capital, a private equity firm controlled by Thomas H. Lee Co. and Putnam Investments, hired two GE Capital Executives to run a $500 million European Internet fund.