DETROIT - In a bid to retain and expand its existing defined contribution and defined benefit plan client base, Comerica Inc., Detroit, has formed World Asset Management Inc., also based in Detroit.
The new firm will provide active and passive global quantitative equity and fixed-income management in separate accounts, and collective and mutual funds for institutional and retail clients.
About $6 billion in indexed client assets from an existing Comerica subsidiary, Woodbridge Capital Management, Detroit, will be moved to World Asset.
Woodbridge will continue to manage actively managed, non-quantitative portfolios for Comerica clients as well as its own clients.
Charles M. Kelso Jr., World Asset's president and chief investment officer, said the quantitative models to be used for investment management are "unique, based on the link between economics and the market," and had been four years in development. Mr. Kelso would not elaborate further.
In addition to the traditional equity indexing World Asset has inherited from Woodbridge, such as Standard & Poor's 500 and 400 index funds, new portfolios will include active quantitative equity and fixed income corresponding to various market segments and subcategories.
Mr. Kelso was until Nov. 15 president and chief executive officer of the investment management subsidiary of Northwest Airlines. Other company officers include Steven A. Albrecht, managing director, formerly president of Investor's Information International, a global equity research firm. Joining World Asset Management from Woodbridge Capital are Todd B. Johnson, who is the firm's director, and Bryan J. Spratt, a portfolio manager.
George Eshelman, executive vice president at Comerica, said the founding of the new firm was a deliberate move by the bank to "segment and focus the investment strategy of our investment management subsidiaries."
Mr. Eshelman said it was apparent to bank executives that quantitative asset management needed to be separated from traditional management efforts. "The skill sets, staff and marketing efforts of quantitative management firms are very different from what's needed in a traditional money management environment. The two investment styles just don't work well together and in fact, often compete with each other. We felt it was better to set up a separate company in response to client demand for a fuller array of quantitative products," he said.
Comerica already has a strong institutional investment presence, with more than 1,500 defined benefit and defined contribution plan clients with more than $20 billion under management. Comerica also has more than 100 master trust and custody clients with $41 billion under trust supervision.
Mr. Eshelman said the new quantitative capabilities will allow the bank to provide a much fuller product array to clients, particularly in a bundled 401(k) service package.