Where do you put the bodies when you increase staff by 60% in two years?
That's the challenge faced by Banc of America Capital Management, which added 140 staff members last year and plans to hire 200 more this year, for a total head count of 900.
Headquartered in St. Louis and Charlotte, N.C., BACAM was created 18 months ago to integrate the various investment management businesses accumulated by Bank of America Corp. under co-Chairmen Michael Kenneally and Robert H. Gordon. Assets under management were $290 billion at year-end 2000, up from $258 billion as of Dec. 31, 1999.
But even after combining BofA's TradeStreet Investment Associates Inc., Sovran Capital Management Corp. and Boatmen's Capital Management Inc., BACAM's aggressive global expansion plans require more people to accomplish the goals. "We had a huge investment management and distribution unit, but it wasn't as efficient or client focused as it needed to be," said Mr. Gordon, who is based in BACAM's Charlotte office.
More than half the staff members hired in 2000 were involved in asset management, with 25 portfolio managers added to institutional investment management teams and 15 to private bank management teams. Portfolio managers primarily were put to work beefing up BACAM's quantitative and growth equity strategies. New research analysts totaled 30, and five traders were hired. The balance of the new hires of 2000 have roles in marketing, client service and administrative support.
High-profile staff additions from the 2000 crop were Steve Young, brought in as director of asset allocation and senior market strategist, and Dan Mulvey, who directs the money market fund management area.
2001 will bring in 50 more people to the investment management side: 25 analysts and 25 portfolio managers and administrative staff members. Almost a quarter of the hires for this year will be institutional sales and marketing staff, with about 10 of those people stationed in Europe, Asia and Latin America, Mr. Gordon said. A good proportion of the new marketers will support BACAM's joint venture with Diversified Investment Advisors, Purchase, N.Y., in the mid-sized 401(k) plan market.
Most new staffers have been housed in existing space in BACAM offices in St. Louis and Charlotte, where the 2001 class of staffers also are likely to be deployed.
Even after adding so many people in 2001, Mr. Gordon said he will need to add even more investment capability, especially in value equities and alternative investments. The latter are in high demand for use in institutional balanced portfolios, as well as by institutional, high-net-worth and retail investors. BACAM now offers two hedge funds and a third through subsidiary Marsico Capital Management Inc., Denver, and it has a modest private equity business. But rather than count on a mass hiring of hedge fund, private equity and venture capital fund managers, Mr. Gordon did not rule out growth in the alternatives area by acquisition or joint venture.
As for how he is luring investment management staff to comparatively off-the-beaten-path offices in Charlotte and St. Louis in the midst of the industry's intense war for talent, Mr. Gordon would say only that compensation packages are "competitive and in line with the rest of the industry" - but presumably it takes more than a promise of a ride up the Arch to persuade portfolio managers to move to St. Louis.