Atlantic Richfield Co.'s $3.5 billion in employee benefit assets probably will be overseen in Chicago once ARCO, Los Angeles, and BP Amoco PLC, London, merge, said Beverly Hamilton, president of ARCO Investment Management Co.
Ms. Hamilton, who has overseen ARCO's pension fund for 81/2 years, is accepting an early retirement package offered in conjunction with the BP Amoco deal, she said.
She plans on leaving when the deal closes, which will be anytime between September and March. She hopes to find another postion in the industry.
All Ms. Hamilton would say about the others on the 10-person ARCO investment staff is she expects them to be seeking positions in the investment industry, too.
"Life is like a book, a series of chapters. This is just another chapter opening up," Ms. Hamilton said of her upcoming retirement.
She and her team oversee Atlantic Richfield's $2.5 billion defined benefit plan and $1 billion savings plan.
Employee benefit assets for North America and the United Kingdom will total $31.7 billion when retirement assets for BP, Amoco and ARCO are combined. Of that, $23.6 billion is defined benefit and $8.1 billion, defined contribution.
BP Amoco in London manages about $16 billion of that; the remainder, presumably, will be managed in Chicago by the original Amoco pension investment team.
Marvin Damsa, BP Amoco director-trust investments, Americas, said no executives from BP America's Cleveland office or the ARCO Investment Management office will be moving to Chicago.
BP America's Cleveland headquarters will be closed at a date to be announced.
Howard Harpster, director of pensions and investments for BP America in Cleveland, confirmed all of BP America's retirement assets will move to Amoco's Chicago investment office, where he expects the same external managers will be used for a while.
Moving on
Mr. Harpster is leaving next month to join Roulston & Co., Cleveland, as chief investment officer. Two other BP America pension officials -- John Kamuta, former manager of growth equities, and Robert P. Goodman, former manager of fixed income -- are joining Roulson as portfolio managers.
Mr. Harpster is unsure what the other four investment professionals will be doing.
Mr. Damsa doesn't know what drove the decision to move the BP America assets to Chicago. "I would like to hope that we had something that appealed to them (BP executives)," he said. He added the group in Cleveland was a good team.
A source close to the BP Amoco pension fund said cultural conflicts between British Petroleum's London investment management office and the Chicago office are becoming a source of irritation.
The source said BP's London investment management team does not like the use of derivatives and is "not as forward looking" as BP Amoco's Chicago team.
The ARCO investment team, meanwhile, was downsized when the company divested its subsidiaries in 1998. In addition, some domestic equities were moved to outside management last October and a search for other managers is under way.
Hired were Barclays Global Investors, San Francisco, to manage a Standard & Poor's 500 index portfolio and active equity managers Alliance Capital Management LP, New York, and Wellington Management Co., Boston. Ms. Hamilton would not give the sizes of the portfolios.
About 40% of the assets are still managed internally, down from 80%.
Renee Goupillaud, who oversees external management for ARCO's pension and savings plans, is in the process of selecting three or four active domestic equity managers ranging from large-cap to small-cap, Ms. Hamilton said. A date hasn't been set for completion of the search. The new managers will run between 45% and 50% of the total fund.
Manager listing
BP America's defined benefit managers are: Alliance Capital; Baring Asset Management Ltd.; Fiduciary Trust Co. International; Hotchkis and Wiley; Mellon Capital Management Corp.; J.P. Morgan Investment Management Inc.; Fayez Sarofim & Co.; Brown Capital; Sanford C. Bernstein & Co Inc.; Valenzuela Capital Partners; and Seix Investment Advisors.
BP America's defined contribution managers are: Fidelity Management & Research Co.; INVESCO Capital Management Inc.; Loomis Sayles & Co. LP; J.P. Morgan; Pacific Investment Management Co.; and Vanguard Group.
Amoco's pension plan is managed mainly by external managers, but Mr. Damsa would not discuss specifically how much and what types of assets are managed internally.
Amoco's defined benefit managers are: Bankers Trust Co.; DSI International Management Inc.; Franklin Portfolio Associates; RhumbLine Advisers; Travelers Investment Management Co.; State Street Global Advisors; WorldInvest Ltd.; Lend Lease Real Estate Investments; ARM Capital Advisors Inc.; Chase Manhattan Bank NA; E.H. Capital Group; First Quadrant LP; Innovest Capital Management; Lazard Asset Management; Martingdale Asset Management LP; Noddings Investment Group; Numeric Investors LP; Salus Capital Management; Standish Ayer and Wood Inc.; and SSI Investment Management Inc.
Managers for Amoco's savings plan are: State Street Global; Bankers Trust; and Brinson Partners.
ARCO's defined benefit managers are: Alliance Capital; Wellington; Capital Group; and AEW Capital Management. Their defined contribution managers are: Equinox Capital Management Inc.; Alliance; Capital Group; Miller Anderson & Sherrered; and PIMCO.
Manager information for the BP assets managed in London was not available.
