BOSTON - Loomis, Sayles & Co. LP is restructuring its core bond and value equity groups to start the new year with what it hopes will be a more cohesive operation.
The 72-year-old company's 11 offices have become a little unwieldy in recent years. For example, Loomis core bond managers in Detroit, Milwaukee and San Francisco might all respond to the same request for proposals. Consultants wondered whether the company was competing against itself.
The new structure puts an end to the unintended competition and addresses the evolution of Loomis' investment management business from a regionally focused business to a nationwide pursuit.
Loomis' $17 billion core fixed-income management group will make its headquarters in Chicago. Michael Millhouse has been appointed chief investment officer for the core group; he formerly was vice president and portfolio manager in the Milwaukee office.
Bond managers in the Milwaukee, Detroit and Washington offices will move to Chicago, bringing the office staff to nearly 30. They will move into a new location May 1. Bond managers in Pasadena, Calif., will move in with Loomis' San Francisco bond group, making that a 10-person bond team and the second office of the core group.
The $30 billion Boston-based total return, non-market related bond operation will remain a separate business unit due to its global, opportunistic focus.
Loomis' $10.3 billion value equity operations will be based in Detroit, led by CIO Issac Green, formerly Detroit's managing partner and a large-cap value portfolio manager. All equity staff will remain where they are: 12 managers in Detroit, two in New York and two in Pasadena.
Changes in investment management staff are not expected, executives said. The core bond group's quantitative analysts, traders and client servicing staff are scheduled to move to Chicago as well, Mr. Millhouse said.
No Loomis offices will be closed at this time, executive said; they will continue to be staffed by Loomis' growth equity team members. The growth equity group, however, may be changed at a later date, officials said.
Loomis, which now has $66 billion in total assets under management, originally was a loose coalition of equity managers established in different locations to be close to their institutional or high-net-worth clients. The satellite offices each developed strategies and pursued their own business.
When searches became more national, as they have in the past decade, the satellite offices found themselves pursuing the same clients, said Mr. Millhouse. Loomis' solution has been to realign by asset class, beginning with appointing a captain for each asset class.
Once combined, the bond group found it had 23 different core fixed-income styles, which have been narrowed to six, without changing the way any client accounts were managed, Mr. Millhouse said.
"We were all using the same research and similar styles. We tried to structure it so every client will continue to have the same manager but benefit from the synergy. We want this to be transparent to the clients," Mr. Millhouse said.
Mr. Green said the equity group closed four products that were under development because they were similar to what is provided by the six existing styles: large-cap value core; large-cap value classic and large-cap value focus; small-cap value; extended small-cap value; and midcap value.
Trading, which had been performed by each regional office, has been centralized. Trading for the core bond group will be out of a new Chicago trading desk; trading for value equity will be done in Detroit.
"We'll get better prices and can even help structure deals that way. And we'll have more confidentiality for our research," said Mr. Millhouse.
