The management team of McMorgan & Co., a money management firm focused on Taft-Hartley union clients, bought back the company from parent New York Life Investment Management.
Terms of the deal weren't disclosed.
A statement forwarded by NYLIM spokesman William Werfelman said the McMorgan team, led by CEO John Santaguida and President Brian Morton, acquired ownership on June 30 to better position the firm for an environment in which union clients are increasingly “diversifying their investments across multiple investment managers.”
In an e-mail, Mr. Santaguida said a quickly evolving Taft-Hartley market “requires products beyond those that we offer through New York Life Investment Management.”
An independent McMorgan, which relies on third-party managers to oversee client assets, can be “more nimble and flexible” in crafting investment solutions for clients and their consultants, Mr. Santaguida said.
According to McMorgan's latest ADV filing with the SEC, the firm was overseeing more than $4.6 billion in assets for 175 clients as of July 27.
NYLIM's statement Friday noted that concurrent with the buyout McMorgan's 23-member real estate investment team, and the assets the team managed, have “joined New York Life Real Estate.” Three years ago, McMorgan & Co.'s fixed-income operations were shifted to NYLIM affiliate MacKay Shields. In an interview that year with Pensions & Investments, John Kim, NYLIM's then-president and CEO, said the aim of that shift was to bolster McMorgan's positioning as “a strong packager and distributor and relationship manager for the Taft-Hartley segment,” while outsourcing the core of the firm's asset management function to a best-of-breed competitor.
In his e-mail Friday, Mr. Santaguida said McMorgan's business model, as an independent firm, will be “to build out our distribution and service platform to offer single and bundled product solutions that can meet the needs of any type of Taft-Hartley plan,” tapping NYLIM money management affiliates, with which McMorgan currently works, as well as other firms.
For example, he noted that McMorgan has already added a private debt/direct lending strategy to its lineup, managed by White Oak Global Advisors.
NYLIM's statement Friday said, “We continue our ongoing strategic alliance, in that McMorgan still represents our investment boutiques — MacKay Shields, Madison Square Investors, Institutional Capital, Private Advisors and Retirement Plan Services — in the Taft-Hartley market, and services Taft-Hartley clients that invest with these boutiques.”
In other news, Mr. Santaguida said Carmen Racy-Choy has joined McMorgan as chief investment officer. Ms. Racy-Choy replaces David M. Steele, McMorgan & Co.'s longtime CIO, who passed away earlier this year.
Ms. Racy-Choy was CIO of the San Jose (Calif.) Federated City Employees' Retirement System and the San Jose Police and Fire Department Retirement Plan, with combined assets of $4.6 billion; she left July 31. City spokesman David Vossbrink said a search is under way to fill both positions.
NYLIM purchased McMorgan in 2001, when the firm had assets under management of roughly $27 billion. Terms of that acquisition weren't disclosed, but investment bankers at the time speculated the purchase price was in the neighborhood of $400 million.