The founding father of the GIC business will be retiring at the end of the year, taking with him the memories of transforming an industry.
"I didn't invent GICs, although some people claim I did," quipped Murray Becker, portfolio manager on the stable value team at J.P. Morgan Investment Management, New York.
The man who was behind such concepts as the laddered portfolio, cloning and equity wash said he plans to relax and enjoy his five grandchildren, although part-time consulting might be a possibility.
Mr. Becker began his career midyear 1972 in the pension area of Mutual of New York, developing investment products for plan sponsors. He then left to join Johnson & Higgins, where he consulted a number of large plan sponsors.
The idea of the laddered portfolio, a portfolio composed of differing GIC maturities, came in response to increasing interest rates in the early 1980s.
The idea of cloning, where an identical but new contract is issued to an acquiring company when a unit is sold or spun off, also was his. This concept had its beginnings when AT&T Co. broke up into regional phone companies in the '80s.
Mr. Becker also fathered the concept of equity wash. This is a provision in a stable value contract that directs any transfers in an employee-directed plans made from the stable value fund to an equity fund option for a certain window of time. This prevents plan participants from switching back and forth in response to interest rates, thus helping the issuer to underwrite the plan without taking too much risk exposure.
In 1988, he founded Becker & Rooney, along with Kathleen Rooney, and continued his consulting work. He sat on the steering committees representing plan sponsors when Mutual Benefit and Executive Life defaulted in 1989.
J.P. Morgan hired Mr. Becker and Ms. Rooney in 1997. His duties will be assumed internally at the firm, according to a spokeswoman.