NEW YORK - Two former Bankers Trust Co. money managers opened their own firm last week concentrating in tactical asset allocation.
The new firm, Polaris Capital Management Inc., is based in New York and will offer several types of global TAA strategies, including tactical cash management and tactical currency management, as well as standard tactical asset allocation.
Two of the firm's principals, Robert H. Greenblatt and Steven A. Lauer, were vice president and managing director, respectively, and co-managers of nearly $3 billion in Bankers Trust's domestic TAA strategy for about 50 clients. They left the firm late last year.
A third Polaris principal, Mary V. Wilkinson, was formerly with GTE Investment Management Corp., where she was in charge of quantitative strategies; more recently, she has been a private consultant for money managers.
Messrs. Greenblatt and Lauer will be replaced at Bankers Trust by Phillip Green, vice president, who has been with the company for 10 years as a quantitative portfolio manager and currency manager. A spokesman for Bankers Trust said the TAA strategy will continue to be run according to a proprietary model, so there should be no effect on client relationships.
There is a lot of interest in the marketplace for TAA strategies, said Mr. Greenblatt. In order to obtain a satisfactory compounding of pension assets, plans are going to have to manage their allocations more opportunistically, he said.
Pension executives have recognized that equity is somewhat overvalued and won't earn the same returns it did in the late 1980s, so they will begin pursuing new investment strategies, such as moving assets among classes, said Mr. Lauer. Additionally, he noted there is interest among 401(k) plans in adding asset allocation or balanced options.
Thanks to that interest in asset allocation, Polaris' principals said they are banking on their experience in TAA to attract clients.
Mr. Lauer noted the two had been working with asset allocation strategies at Bankers Trust since 1983, and had been working on global asset allocation since 1991.
"This is not a flash in the pan for us. In a sense, the industry trend is moving toward us, so the timing is fortuitous. But we're going to be doing tactical asset allocation whether the sun shines or not," said Mr. Greenblatt.
All three principals will manage portfolios for clients, who are expected to be mainly institutional investors. Mr. Lauer will be chief investment officer, Mr. Greenblatt will head marketing and client relationship efforts, and Ms. Wilkinson will perform quantitative evaluation of investments.
The firm's principals have already begun contacting prospective clients, and many Bankers Trust clients have expressed interest in Polaris' product, Mr. Lauer said.