A consultant won't meet in money managers' offices located in landmark high rises - such as Chicago's John Hancock Center - because they could be targeted by terrorists. A portfolio manager regularly eyes trash cans, fearing bombs. A money management executive changed his work schedule to ensure he's home for dinner with his family. There probably are hundreds of personal stories about how life has changed for members of the money management community since the Sept. 11 terrorist attacks. Overall, however, it's business as usual.
"It's a terrible thing to say, given the terrible loss of life and the horrific nature of the crime, but life goes on. Business goes on," said Kathy Taylor, managing director and head of institutional business at Barclays Global Investors,
San Francisco. "I'm hard-pressed to see what the long-reaching implications are. On a day-to-day basis, it's hard not to get dragged into the morass of daily business life."
"The greater spirituality that people might have presumed would come out of Sept. 11 - sure, some people, I'm sure, have quit their high-pressure jobs and are spending more time with their families - but I don't think you can say the culture has been reshaped by this in a dramatic way," said Peter L. Rathjens, managing partner and chief investment officer at Arrowstreet Capital LP, Cambridge, Mass. "It's like a lot of disasters; Pearl Harbor, for instance: People will remember it forever, but the scars will heal and people will go back to doing what they were doing."
Headaches
Most of the changes made after Sept. 11 are mere headaches that affect efficiency, said industry sources.
Gail Bardin, a portfolio manager and principal at Hotchkis & Wiley Capital Management LLC, Los Angeles, said there are "no more last-minute dashes for the airport. You have to leave more time to get through the airport, plan less meetings per trip, get less done on each journey."
Mellody Hobson, president of Ariel Capital Management Inc., said employees there felt an immediate effect after Sept. 11 because Ariel is located in a landmark building in Chicago - the Aon skyscraper. Building management instituted stringent bag searches right after the attacks that continued until very recently, when a badge scanning system was installed, making entry and exit much easier, Ms. Hobson said. Ariel employees are traveling more than ever, she said, because of the volatile markets.
"What's impacting us and our clients more is the confluence of events - the economy, the markets, accounting scandals, Sept. 11 - rather than the single day's events," Ms. Hobson said.
Ms. Hobson's comments echoed those from the industry as a whole. Whether Sept. 11 exacerbated the decline is a matter of debate, but the market's fall in the past year is the primary focus of sponsors, their money managers and their consultants.
"From the investment standpoint, we aren't doing anything differently in response to Sept. 11. Our changes are market-related," said William F. Quinn, president of AMR Investment Services, which manages $5.5 billion in pension assets for AMR Corp., Fort Worth, Texas. Mr. Quinn said changes at his plan include more frequent rebalancing because of extreme volatility in the markets and the search for better returns, which is leading the fund to consider more private equity investments and structured products.
"Not to downplay it (Sept. 11), but there's an awful lot of other stuff that's happened since then that has had more of a direct impact on what we do," said Jeff Nipp, director of investment manager research at Watson Wyatt Investment Consulting, Atlanta.
Dealing with the "other stuff" is ultimately what money managers have had to do to in order to concentrate on the fiduciary responsibility they have to their clients, said Arrowstreet's Mr. Rathjens.
Even those money managers located in or near the World Trade Center, who lost colleagues, information and equipment when their offices were destroyed, now are back on their feet:
* Fred Alger Management Co., New York, moved to new offices in midtown Manhattan from the World Trade Center, replaced members of its investment team lost in the attack, added 15 additional staffers and is focused on better distribution in the institutional market (Pensions & Investments, June 10).
* OppenheimerFunds' employees now work in a low-rise, anonymous building in midtown. Gregg Stitt, a spokesman, said while offices were moved, "there was no impact on our business practices as a result of 9/11. We've added hedge funds, completed two acquisitions, had record new sales days and months, and added a new high-yield bond team since last September. We've moved on."
* Fiduciary Trust Co. International Inc. has added employees, moved to new headquarters in Rockefeller Center and had strong sales growth on the institutional and high-net-worth investor fronts in the past year, said Bill Weeks, a spokesman. Employees have participated in several Sept. 11 benefits and commemorations, and more are planned.
* Merrill Lynch Investment Managers re-established an office at the end of August in downtown Manhattan with "a much smaller footprint," said Frank Salerno, chief operating officer for the Americas. The new office has about half the staff - 75 to 80 - that previously worked from New York.
Changes at work
Still, some money management executives have made changes to their work lives.
Debbie Flickinger, chief operating officer and global chief of staff for the Americas at Deutsche Asset Management, said she has become more efficient and more careful.
Because her commute doubled to 21/2 hours when her office was moved to midtown Manhattan, Ms. Flickinger has better equipped herself to work at home, where she now has a fax machine and a computer, and she is never without her cell phone and a Blackberry with contact numbers close at hand.
Hotchkis & Wiley's Ms. Bardin said she has developed an insatiable curiosity about the Middle East.
"I'm reading every article I can get my hands on" about the politics, the people and the governments of the Middle East," she said. At home, she has been reading through a stack of books on the history of the region, fundamentalism and analysis of current political events.
She also subscribes to an intelligence service that puts world news into context and provides analysis. While she has always followed world events, Ms. Bardin said, "this is the most detailed I've gotten. The downside is that it sucks up a lot of time."
"There's so much emotion in the market, so much saber-rattling and big events. It's hard to tell the impact on earnings and I invest in a lot of multinational companies that may be impacted. If I don't know what's going on, I won't understand what's going on in the markets, and I need to follow the impact on companies (I invest in) and clients," said Ms. Bardin.
John Wesley, a product manager at Teachers Insurance and Annuity Association-College Retirement Equities Fund, New York, watched in shock from his midtown office as the World Trade Center burned a year ago.
Now, Mr. Wesley said, things are pretty much back to normal, except that he leaves the Venetian blinds in his office down. He used to keep them up, so he could see outside.
"If something silly ever happens, it's some measure of protection. The world is a different place," he said.
Greater cynicism
In the end, perhaps the lack of change in the industry says as much or more than if things had changed dramatically, said attorney Richard Koppes, former general counsel for the $136 billion California Public Employees Retire- ment System, Sacramento. "That says something about this country and capitalism in general," Mr. Koppes said. "As horrible as that was, isolated acts don't really, can't really damage the system."
Sept. 11's main impact has been to alter the traditional thinking that "everything will be all right," said Rolf Banz, chief investment architect at Geneva, Switzerland-based Pictet Asset Management.
"There is greater cynicism and just worry. Had Enron and others not happened after Sept. 11, they might have been viewed a little differently. There has been a gradual reduction in trust. What we're willing to believe about the world around us has changed."
