NEW YORK - UBS Asset Management (New York) unexpectedly replaced its two top U.S. executives, leading industry observers to wonder if more changes are on the way.
Thomas Messmore, president and chief executive officer, and John Hock, the firm's head of marketing, left the firm suddenly this month. A spokeswoman for UBSAM (New York) said the two had resigned, but would not elaborate. Reached at their homes, neither Mr. Messmore nor Mr. Hock would comment.
Sources familiar with the firm said the sudden departures were due to changes at the parent company level. UBSAM's parent, Union Bank of Switzerland, realigned some responsibilities to report directly to the Zurich-based executives in charge of those business lines, rather than to the heads of the regions where those functions were housed. Rather than report to the head of the UBS Group in the United States - Richard Capone - the asset management unit now reports to Arthur Descurtins, head of the private banking and institutional asset management division of UBS Group in Zurich.
UBS announced Jim McCaughan and George Jamgochian have been appointed to succeed Messrs. Messmore and Hock, respectively. Mr. McCaughan previously was an adviser on institutional asset management at UBS' head office in Zurich and Mr. Jamgochian most recently was head of North American business development for UBS Asset Management (London). Mr. McCaughan had spent 17 years with UBS (London) and its predecessor company, Phillips & Drew Fund Management; before moving to Zurich, he had been the head of international business at UBSAM (London).
Sources familiar with the situation speculated the new management will make additional staff changes. One Wall Street headhunter noted the bank first tinkered with the investment process last year, which led Chief Investment Officer Paul Morris to leave the firm; it now appears to be targeting asset-gathering activities, which were the province of Messrs. Messmore and Hock.
The Zurich-based bank has been trying to build a successful U.S. asset management operation since buying the former Chase Investors Management Corp. in 1991. UBSAM (New York), which had more than $30 billion in tax-exempt assets under management at the time, now has more than $35 billion. Approximately half of the firm's assets come from international clients, including a large component of assets for foreign central banks (Pensions & Investments, April 29).
People familiar with the firm said the departures of Messrs. Messmore and Hock were amicable, although completely unexpected. Both had joined the firm only last year: Mr. Messmore in May from Travelers Cos., where he was senior vice president and chairman of The Travelers Asset Management International Corp., and Mr. Hock in October from Oak Hall Capital Advisors, where he was executive vice president in charge of marketing.
The latest changes are not part of an overall restructuring, said Mr. McCaughan. UBS is trying to leverage its presence worldwide and wants to develop its U.S. business as part of its global asset management business. He noted both he and Mr. Jamgochian have a record of building assets across borders during their time with UBSAM (London).
UBS has $175 billion in institutional assets worldwide spread across five locations: New York, London, Zurich, Tokyo and Singapore. Being able to call on those global capacities, rather than concentrate only on the local market, gives a strong advantage in a fiercely competitive market like the United States, he said.
UBSAM (New York) had been trying to increase its presence in the U.S. market by acquiring new products and expanding its marketing efforts to U.S. institutions. Last year, it bought Resource Investments Inc., a West Lebanon, N.H., timber manager. Also during the last year, it hired a group of staffers from Spare, Kaplan, Bischel & Associates in San Francisco to start a value equities group in that city.
Mr. McCaughan said the firm has ambitious plans but doesn't need to be all things to all people.
"We will build on the products we have, but we can't do everything for everyone," he said. "We will really put resources behind those products that we can gain an advantage on in a fiercely competitive market." Mr. McCaughan said he is confident of the staff he has and wants to "provide them with the leadership and the framework that will enable them to succeed."