Most mergers of asset management companies result in the new company having more assets under management.
However, six months after the merger of real estate advisers Aldrich Eastman Waltch and Copley Real Estate Advisors, the total assets of the new company are down.
Also, several key AEW employees have left - important because it was viewed as the stronger institution - and an investment fund was pulled from the market.
Is AEW Capital Management suffering from post-merger stress disorder?
No, said Steve Corkin, managing director and head of client services of AEW.
AEW's assets under management as of June 30 are down to $5.7 billion from a combined estimate of $7 billion a year earlier because many of the Copley and AEW commingled funds are liquidating; also, assets from takeover business received by AEW are being sold, said Mr. Corkin.
Senior AEW officials Adam Berger, Pat Sullivan, Doreen Biebusch, Clifford Brown and Greg Shay left since the merger. Messrs. Berger and Sullivan were responsible for investments in AEW Partners I and II. AEW plans to raise money for AEW Partners III this fall, but its fund-raising success will be tied to the investment success of funds I and II.
Mr. Brown was the head of AEW's debt securities effort and was chosen to lead the AEW Mezzanine Fund, which had received verbal commitments of between $250 million to $300 million before it was pulled when Mr. Brown departed.
The pension fund for Chicago-based Ameritech terminated AEW as the manager of its commercial mortgage-backed securities program because of Mr. Brown's departure.
AEW is deep enough to survive the turnover, said Mr. Corkin.
"While they were very talented guys, they were a small percentage of our deal guys," Mr. Corkin said about Messrs. Berger and Sullivan. "There are lots of them left."
The Mezzanine Fund was a dicier situation because AEW marketed it as the "Cliff fund," he said. "Could we have executed it in his (Mr. Brown's) absence? Absolutely.
"But you don't want to do it.
"When you work hard to restore client confidence, you won't put it on the line to do the wrong thing," said Mr. Corkin.
Also, he added, clients appreciated AEW's candor.