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Money management

Amundi Smith Breeden going global after merger

A year later, the fixed income manager to offer global strategies

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Michael J. Giarla: We didn’t have managers on the ground in Europe and Asia

Amundi Smith Breeden LLC has been in growth mode in the year since its creation from the acquisition by Paris-based Amundi of U.S. fixed-income specialist Smith Breeden Associates.

Executives at the Durham, N.C.-based money manager are creating the firm's global fixed-income capabilities, making a dozen appointments during the past year and are looking to recruit about a half-dozen more over the course of the next 12 months.

With Amundi as a corporate parent, Amundi Smith Breeden will soon have the ability to offer global strategies for the first time in its history.

“We've been a U.S.-focused fixed-income management firm,” explained Stephen A. Eason, Amundi Smith Breeden's senior executive vice president and director of marketing and client service. “We did have clients outside the U.S., but our platform is focused on management within the U.S.”

Michael J. Giarla, CEO of Amundi Smith Breeden, said prior to Amundi's acquisition, “the ability to offer global fixed-income strategies both within and outside the U.S. wasn't something Smith Breeden could really do.”

“We didn't have managers on the ground in Europe and Asia.”

The result of Smith Breeden becoming part of Amundi meant that not only could Amundi Smith Breeden take advantage of Amundi's global offices and expertise, but also Amundi could expand its presence in the U.S. and leverage Smith Breeden's capabilities domestically.

Patrick R. Pagni, chairman and Amundi's senior regional manager for North America, said that although Amundi could offer global fixed-income strategies before the acquisition, “it was pretty weak in its U.S. exposure. Now, we have a very credible offering in global fixed income.”

“We intend to take (Amundi Smith Breeden's) offerings to the rest of the globe.”

Amundi Smith Breeden plans to have a global high-yield strategy and global fixed-income strategies, both aggregate and unconstrained, available to clients next year.

Some of the recent recruits are:

  • Michael L. Ford, senior vice president and U.S. head of consultant relations, formerly a senior investment consultant at RVK Inc.;
  • Kenneth J. Monaghan, managing director and head of global high yield, formerly a partner and head of U.S. high yield at Rogge Global Partners PLC;
  • Tim Cassidy, portfolio manager, corporate credit, previously director of fixed income at Stifel, Nicolaus & Co. Inc.; and
  • Elke Urban, director of marketing, formerly director of global institutional marketing at MFS Investment Management.

Of the dozen hires over the past year, 10 of the positions are new, and two are replacements.

Mr. Pagni said he expects most of the new hires in the coming year will be in investment management and research. Officials also anticipate adding U.S. investment team staffers to enhance the firm's ability to manage Amundi's flagship investment strategies, which focus on global fixed-income and emerging markets, for U.S. institutional clients.

Amundi Smith Breeden had $8.42 billion in assets under management as of Sept. 30, $6.18 billion of which was U.S. tax-exempt. By comparison, data from Pensions & Investments show that the firm had $6.87 billion in assets at Dec. 31, $4.72 billion of which was U.S. tax-exempt.

Data from the Marietta, Ga.-based eVestment LLC show the Amundi Smith Breeden's investment-grade core strategy returned 4.51% for the year ended Sept. 30, vs. 3.96% for its benchmark, the Barclays U.S. Aggregate bond index. Its five-year annualized return was 5.91%, vs. 4.12% for its benchmark. And its 10-year return was 4.89%, vs. 4.62% for its benchmark.