WESTPORT, Conn. - The Common Fund plans to reorganize its management structure following the departures of five investment people in recent months, including its equity and fixed-income department heads.
David Storrs, chief executive officer and president, said the restructuring was not caused by the departures, but rather by the growth of the Common Fund.
But some former Common Fund officials said a change is overdue and that the string of departures was related to the hierarchical organizational structure.
"To say it's a top-down approach is an understatement," said one former trustee. It's not an organization where "people can go to the bathroom without raising their hand," he said.
The $20 billion fund, which is a manager of managers for university endowments, is seeking a chief investment officer, a new position. That individual would report to Mr. Storrs. Russell Reynolds Associates is conducting the search.
The fund also is searching for heads of equity and fixed income following the departure of Robert Shultz and Frank Haines in February. The respective acting equity and fixed-income department heads - Steve Eckenberger, vice president, and MaryEllen Beaudreault, assistant vice president - are in the running for the positions.
The heads of equity and fixed income - as well as Curt Tobey, the head of international investments - would report to the new CIO.
Mr. Storrs said high-level departures are a rarity for the Common Fund and, in fact, three of the five people who left in recent months were not senior executives.
"Frank Haines is the only senior person who has (voluntarily) left the firm, I believe it's fair to say, in five or six years," said Mr. Storrs.
"Bob (Shultz) did not leave voluntarily. We agreed we would separate. He was the one who made clear to others the way he wanted the story told. Things did not work out and we decided to part company."
Mr. Haines, who was a vice president of fixed income, has joined STW Fixed Income Management as senior vice president of client service in Bermuda.
Elizabeth Hilpman, who was a vice president, "said last July she was leaving for personal reasons. She wanted to go to New York," Mr. Storrs said.
She had reported to Mr. Shultz, who did not replace her, he said.
Ms. Hilpman, who last week left her job as director of research for Dubin & Swieca, a hedge fund manager in New York, said the Common Fund had changed during her tenure.
The Common Fund "went from being a very entrepreuneurial jack-of-all-trades (place) where individuals wore lots of different hats, to .... a real giant organization where there was more structure."
Mr. Shultz was a senior vice president in charge of domestic equities at The Common Fund since the end of 1993. He declined to comment. One former employee said the Common Fund's management structure was at least partly to blame for the recent departures.
"A lot of people don't leave an organization for no reason at all. There are too many people for it to be coincidental, although it certainly could be portrayed that way," said Mary Ida Compton, formerly an assistant vice president and equity analyst for the Common Fund. Ms. Compton resigned in March to join Allen Biller & Associates Inc., Palo Alto, Calif., as a senior associate.
"I didn't feel there was potential there for me, personally. Responsibility isn't entirely delegated. You reach a certain point and have the expectation that responsibilities will be delegated. Those decisions still need to be given the full OK of senior management," she said.
The former Common Fund trustee, who asked not to be identified, echoed her view: "When things like this happen, I don't think it's ever haphazard."
He said Mr. Storrs' management style is "remarkably similar" to that of George Keane, the former chief executive, who remains chairman of the board of trustees.
Ms. Compton was with the fund for 31/2 years, and had reported to Mr. Shultz. She has been replaced from within by Kim Ciriello, who will be a senior equity analyst.
"It is the case I was not empowered to my capacity. .*.*. I don't want to speak for how other people felt."
Mr. Storrs declined to comment on the alleged lack of delegation of authority.
Commenting on his departure, Mr. Haines said: "My situation was unique. It was not related to the others. I filled a need at STW for a client service rep. I'd been there for eight years. It was time to move on."
Mr. Haines said he had hired many people in the fixed-income area during his tenure and that it was "well-staffed."
STW manages money for The Common Fund.
Mr. Storrs credited Mr. Haines with the fund's top fixed-income numbers. "I think the world of Frank. We're in the top 5% of all bond funds (in the PIPER universe) over three, five and 10 years largely because Frank is a terrific person. He's going to make more money (at STW) than we could ever pay him."
"There's no doubt in the world I would love to keep Frank Haines. On the other hand, to be the head person for Billy Williams (STW's chief executive officer) and handle all U.S. clients for one of the three or four leading bond managers in the world" was a compelling opportunity, he said.
As for the new hires, "we're not just plugging in a new Bob for equity and Frank for fixed income. We're searching for a new chief investment officer. We have $20 billion under management with 120 investment managers. I wanted to have one person with broad supervisory responsibility for the entire investment area," Mr. Storrs said. This will allow for more integration of strategies - such as derivatives - across many investment areas.
But Ms. Compton said Mr. Shultz's differences with the Common Fund, which were well publicized in the industry, might make it difficult for it to attract a chief investment officer. Prior to joining the Common Fund, Mr. Shultz held senior positions at TCW and in the investment departments of a number of major corporate pension funds.
As for the other people who left The Common Fund, the latest person to announce her resignation, Ellen Scott, is returning to graduate school for a degree in social work. She had been at the fund nine years as a computer programmer, Mr. Storrs said.
Catherine S. Holtz, who resigned in January, moved back to Chicago, where she is a senior consultant for Ibbotson Associates. She had been a client service representative for the Common Fund.
Calls to several Common Fund trustees were not returned. Some were in London with Mr. Storrs and other investment officials discussing the launch of a new fund. Mr. Storrs said he was advising trustees not to comment for this story.