LONDON -- The defection of a key player in the joint venture between Callan Associates Inc. and Bacon & Woodrow is a blow but will not upset the operation, officials of the two organizations said.
Nigel O'Sullivan, an investment partner at London-based Bacon & Woodrow, will leave the London-based actuarial firm to head up Goldman Sachs International's new European pensions and insurance strategy group.
Mr. O'Sullivan also was the point man for Callan, Bacon & Woodrow Ltd., a joint venture between the two organizations aimed at targeting the continental European pension market. The joint venture is awaiting regulatory approval.
Ron Peyton, president and chief executive officer at Callan, said, "we have no concerns at all on this side" about the impact on the joint venture. "Nigel is a very good rainmaker who has a real opportunity at Goldman Sachs, and he should do quite well."
Nick Fitzpatrick, head of the investment consulting practice at Bacon & Woodrow, acknowledged Mr. O'Sullivan's departure is a loss for his organization. But he said Bacon & Woodrow's 50-plus strong investment practice and San Francisco-based Callan's 160-odd employee firm have adequate resources to fill the breach.
In addition, he noted Bacon & Woodrow's head of U.K. manager research, Michael Kinney, will work in Callan's offices for the next year or two. There are no current plans to transfer a Callan employee to London.
Still, Mr. Fitzpatrick said Bacon & Woodrow will be seeking a senior international investment consultant, a significant chunk of whose duties likely will fill the gap to be left by Mr. O'Sullivan.
The well-known Mr. O'Sullivan said his new post will pull together several areas of Goldman's investment expertise.
He said his unit will help design protection strategies to prevent U.K. pension funds from running afoul of the 1995 Pension Act's minimum funding requirements. By 2002, if pension assets fall below 90% of liabilities, the plan sponsor will have to make a cash injection.The unit also will advise on managing transitions between money managers, which can cost up to 2% of a portfolio, according to recent studies.
In addition, a shift toward more market-based U.K. accounting rules for pension funds will make finance directors more sensitive to market volatility. Mr. O'Sullivan said his unit will focus on risk control and surplus management.
Other areas of emphasis will include servicing multinational companies, aiding the insurance industry deal with mergers and solvency standards, and consulting to Goldman, Sachs & Co., Asset Management Division.
