Retirement board opens Md. fund to more minorities


The Maryland retirement board is moving to give a bigger portion of its $18 billion pension fund to minority-owned investment firms to manage.

Several minority-owned firms have submitted proposals to invest share of the state's assets, and a committee of the retirement system's board of trustees plans to interview the companies soon.

The board's move follows the lead of Gov. Parris N. Glendening, who has made a priority of increasing minority state business. Bucking a national trend against affirmative action, Mr. Glendening helped pass legislation this year expanding the goal for minority participation in state contracts.

Seven or eight minority-owned firms manage about $75 million in state assets for the retirement system, according to Peter Vaughn, executive director of the State Retirement Agency. That is less than 0.5 percent of the state's portfolio.

Among the minority-owned businesses seeking the investment work is Chapman Co., the Baltimore company founded and controlled by Nathan A. Chapman Jr., a political supporter of Mr. Glendening.

In 1993, the city of Baltimore began considering a plan to invest $10 million in Mr. Chapman's company. The proposal collapsed in August 1994 when the Securities and Exchange Commission warned that the city would face severe financial and legal risks by making such a large investment in a small investment house.

Mr. Chapman has pushed aggressively in recent months to win some of the state's investment business, according to board members.

Mr. Chapman was not available yesterday and a company official did not return a telephone call seeking comment.

Mr. Chapman's effort has the backing of many black legislators.

"I think Nate is going to find more and more that the Legislative Black Caucus and others will help him to get in the doors," said Del. Elijah E. Cummings, a black Baltimore Democrat. "I want to open the doors not just for Nate but for African-American children who want to grow up to be Nate Chapmans."

A longtime political player in Baltimore, Mr. Chapman has also emerged as an ally of the governor. Mr. Chapman and his wife gave $3,000 to Mr. Glendening's gubernatorial campaign.

In February, Mr. Glendening appointed Mr. Chapman to the University of Maryland board of regents.

Dianna Rosborough, a spokeswoman for Mr. Glendening, said Mr. Chapman has not asked the governor for help in winning the state pension work. She said Mr. Glendening wants to increase minority dealings with the state but has not asked the retirement board to expand its contracts with minority firms.

At the same time, the governor wants to keep as much state business with state firms as possible, Ms. Rosborough said. That goal could benefit Chapman Co. because Maryland has so few minority-owned investment firms.

The retirement board has not decided how much more of the state's assets it will place with minority-owned firms, according to Mr. Vaughn.

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