Business Briefs

Reported by Star-Bulletin staff & wire

Monday, December 27, 1999

Buffetts donate shares to charities

OMAHA, Neb. -- Berkshire Hathaway Inc. Chairman Warren E. Buffett and his wife Susan said they have donated $135 million worth of Class A shares to four charitable organizations.

The Buffetts announced the gifts "because there have been occasions when gifts by them have been reported in the media as sales," the couple said in a news release. "Mr. and Mrs. Buffett have never sold any Berkshire shares."

The charitable groups were not identified, according to Bloomberg News. The couple donated 2,500 Class A shares, which closed Thursday at $54,000 each. Based on that price, the gift is worth $135 million.

Interneuron wins anxiety-drug pact

LEXINGTON, Mass. -- Shares of Interneuron Pharmaceutical Inc. jumped 35.3 percent today after the company said it would license the rights to its pagoclone anxiety drug to Warner-Lambert Co., in an agreement that could be worth as much as $74 million to Interneuron.

Shares in Lexington-based Interneuron rose $2.37 to $6.87 on the Nasdaq.

The company will receive an initial payment of $14 million and will receive additional payments from Warner-Lambert if the drug achieves certain milestones.

Japan says its ready to confront Y2K

TOKYO -- With less than a week to go before the Year 2000 begins, Japan says it's ready for the Y2K bug's worst -- but not expecting it. Government calls for citizens to stock up on food and water have stirred some concern abroad that Japan is less than fully confident about its preparations for millennium-related computer glitches.

But officials and experts say Japan has made good progress after some initial sluggishness and see little cause for panic.

"We've done all that we can at each ministry and I personally feel strongly that there will be no major disruptions to the social infrastructure from the millennium bug," said Kazuo Okumura of the government's Y2K task force.

---

Of Mutual Concern

News for mutual fund investors

Fidelity Investments hits $1 trillion in assets

BOSTON -- Fidelity Investments has reached the $1 trillion milestone in assets, as surging stock markets and its own investment prowess have added more than $500 billion in money under management since 1997.

Boston-based Fidelity has rebounded since 1997, when the firm promoted its top lawyer, Robert Pozen, to head its money management arm. That was after a year when performance sagged, managers of some of its biggest funds defected to rival companies, and in June 1997 Fortune magazine published an article entitled "Has Fidelity Lost It?"

Now Fidelity, which was managing $100 billion in assets in 1989, may soon overtake UBS AG, Europe's No. 2 bank, as the world's biggest money manager. UBS was ahead in September, when it had about $1 trillion in assets, though expansion of its assets has been anemic compared with Fidelity's.

"One of Fidelity's greatest strengths is their equity research," said Geoff Bobroff, an investment management industry veteran who runs a consulting firm in East Greenwich, R.I. Closely held Fidelity also spends "tons on technology" and is willing to keep doing so even if it eats into profit, a luxury public companies don't have, he said.

The firm's tenacity in markets outside the United States is also paying off, Bobroff said.

Poll: Funds sell bonds, buy growth stocks

LONDON -- Global fund managers are offloading bonds amid rising world economic optimism and an average forecast that the U.S. Federal Reserve will hike rates twice in 2000, a Merrill Lynch Gallup poll showed.

Among funds, commodity price bulls outnumbered bears by the largest margin in nine months in December and fund managers have turned sellers of bonds in the United States, continental Europe and Britain for the first time since September, the poll showed.

But despite rising concern about the impact of higher economic growth on central bank policy and bond prices, fund managers are still switching out of economy-sensitive cyclical shares into interest-rate sensitive growth stocks.

"It is strange to see fund managers selling bonds to buy growth stocks which in many ways behave like ultra-long duration bonds," said Trevor Greetham, global strategist at Merrill Lynch in London. "A return of global pricing power and higher bond yields should favor value stocks and cyclicals," he said.

Money managers cut cash reserves to 4.7%

LONDON -- Money managers around the world are holding less cash than they have in at least two years, a bearish sign for global stock markets, many of which hover at record highs, according to an industry report.

The average global fund manager has 4.7 percent of assets in cash, down from 11.2 percent as recently as September 1998, according to a survey by Merrill Lynch & Co. of 243 investment firms that oversee a combined $8.3 trillion.

"With cash levels so low, fund managers don't have as much firepower and that's not a good indicator for the stock markets," said Trevor Greetham, an investment strategist at Merrill who compiled the monthly survey.

Fund managers in the United States and continental Europe have been particularly aggressive about using cash to buy stocks, helping explain recent market rallies in those regions.

Warburg picks manager for Growth & Income Fund

NEW YORK -- Warburg Pincus Funds, a unit of Credit Suisse Asset Management LLC, picked manager Scott Lewis to replace the departing Brian Posner as co-manager of the firm's $650 million Growth & Income Fund.

Posner, 38, one of the best-known practitioners of "value" investing, said he's leaving the New York-based money manager at the end of the month and take some time off before starting another job, likely with a smaller company. Lewis, 40, joins Stacy Dutton as co-manager of the Growth & Income fund. Dutton, 37, was picked by Warburg this summer to help Posner run Growth & Income, which had $725 million in assets in August. Posner picked Dutton to co-manage the fund after hiring her two years ago as an analyst from Jennison Associates Capital.

The Growth & Income Fund gained 4.05 percent this year through Friday, ranking No. 359 of 646 "growth and income" funds tracked by Bloomberg Fund Performance.

Lewis will continue as co-manager of the Warburg Pincus Global Telecommunications, with $175 million, and the $38 million Balanced Fund.