Ivan Wheen, the head of Bankers Trust Co.'s $200 billion global investment management group, will relinquish that position at year end. He will assume another post in Singapore, where he will be responsible for overseeing Bankers Trust's strategy and business in Southeast Asia, sources inside Bankers Trust report.
Mr. Wheen did not return calls.
Ian Martin, the head of funds management of BT Australia Ltd., Bankers Trust's Sydney-based subsidiary, will head global investment management and will have responsibility for all of Bankers Trust's money management operations, said other Bankers Trust sources.
Additionally, Bankers Trust will install a new head for U.S. investment management and has offered that position to Frank P.L. Minard, president of Mitchell Hutchins Asset Management, New York.
A source inside Bankers Trust confirmed Mr. Minard has been offered the job, but had not accepted. Mr. Minard was in meetings and unavailable for comment; he did not return phone calls. A Bankers Trust spokesman had no comment.
Sources speculated the changes were precipitated by the departure of Bankers Trust President Eugene Shanks Jr. Mr. Shanks, widely viewed as Mr. Wheen's supporter and the force behind the firm's emphasis on active management, resigned effective Jan. 1, after being passed over to replace Charles Sanford as chairman and chief executive officer; Senior Vice Chairman Frank Newman was appointed instead.
Mr. Wheen "was one of Gene Shanks' boys," said a Wall Street recruiter. With Mr. Shanks resigning as president, most of his management team is likely to go with him, said several sources.
However, sources inside the bank said Mr. Wheen's departure was due to a number of factors unrelated to the departure of Mr. Shanks. Mr. Wheen, a native Australian, had personal reasons to want to relocate, including an illness in the family and concern about his children's education. He originally made his mark in Bankers Trust's Honk Kong trading operations.
Additionally, Bankers Trust was still managing the bulk of its assets in passive products, despite a restructuring last year during which Mr. Wheen took over, charged with increasing active management operations.
The global investment management unit, which manages $200 billion, including $170 billion in U.S.-based assets, has been trying to emphasize active management, but has not been very successful. Instead, it suffered from a tide of defections among its top management and middling results in active management (Pensions & Investments, April 3).
According to figures submitted by the firm for P&I's Money Managers Directory, total assets under management dropped to $181.8 billion Jan. 1, 1995, from $184.5 billion Jan. 1, 1994 (P&I, May 15). It has rebounded, growing to approximately $200 billion as of Sept. 30. According to the figures from by the firm, Bankers Trust is allocated 56% in stock, 28% in cash, and 5% in bonds, with the remaining assets in tactical asset allocation accounts or GICs.
The increase to $200 billion since Jan. 1 is only a 10% jump, while market returns based on that asset allocation would have brought the total assets to approximately $217 billion - a 19.1% increase - had the accounts stayed put.
The firm "had been bleeding active management assets like a gusher," said a competitor, who also is a former Bankers Trust manager. The firm's total assets under management don't appear depleted, thanks to a nearly 30% return in the domestic equity market this year, he said.
The restructuring of the asset management operation in early 1994 included the merger of the investment management and funds management units into one group covering institutions, hedge funds and high-net worth individuals; and the elimination of the London-based active international equity group. Traditional investment managers, such as Kent Atkins, former chief investment officer, were sidelined into client service roles within the company's strategic advisory group, while executives with trading backgrounds filled key executive spots; Mr. Atkins was replaced by Mr. Wheen, a former currency trader from Bankers Trust's London office.
The appointment of Mr. Minard could be a wise step for the firm, said observers. Not only is he well known as an investment management veteran, he also has experience steering a troubled organization to stop the loss of staff and clients. If he accepts the position, he would bring in the name and reputation necessary to put the industry on notice that Bankers Trust is serious about getting asset management back on track, said a competitor.
If Mr. Minard takes the post, he will find himself in the same situation as when he was named chairman and CEO of Mitchell Hutchins in 1993, after the resignation of then-President Joyce Ferhnstock. At the time, Mitchell Hutchins was embroiled in a lawsuit with Kleinwort Benson International Investment Ltd. over the defections of Ms. Ferhnstock's predecessor, Stephen Canter, and five fixed-income managers. She resigned later, following problems with Mitchell Hutchins' money market funds.
In January, Mitchell Hutchins appointed Margo Alexander, an executive vice president of its parent, PaineWebber Inc., as president and CEO. The appointment was seen by some people in the industry as an effort to ease out Mr. Minard, who remained as chairman of the company.
However, some consultants and competitors privately wondered whether the situation at Bankers Trust's global investment management unit can be stabilized without first resolving the controversies over its parent company's derivatives trading practices. Some consultants were doubtful whether new management can do more than right the ship while the parent is embroiled in litigation with clients like Procter & Gamble Co. over derivatives losses. So far, investment management clients claim they have not been affected (P&I, Oct. 16).