Top investment management talent deals in 2002 mirrored M&A activity during the year: Recruitment activity was slow overall, and blockbuster people moves were few and far between.
Nevertheless, executive recruiters reported some strategic personnel changes to replace entire investment teams of underperformers, add experienced business managers at the CEO and CIO levels, and take advantage of poor financial markets to significantly upgrade talent.
Herbert Allison Jr.'s move back into money management was at the top of many a recruiter's list of the most interesting and significant personnel changes of 2002, according to an informal survey by Pensions & Investments.
Mr. Allison became chief executive officer of the Teachers' Insurance and Annuity Association-College Retirement Equities Fund, New York, replacing John Biggs, who retired. Mr. Allison was president and chief operating officer of Merrill Lynch & Co., New York, until his retirement in July 1999.
Another big move: Charles E. Haldeman took the new position of co-head of investments at Putnam Investments. He shares the role with Steven Oristaglio, who focuses on fixed income, while Mr. Haldeman focuses on equities. Mr. Haldeman had been president and CEO of Delaware Investments, Philadelphia, and earlier in his career was a senior executive at United Asset Management Corp., Boston.
Recruiters were universally interested in Mr. Haldeman's move. Putnam has been troubled by poor investment returns, client terminations, modest layoffs and high personnel turnover.
While Mr. Haldeman is acknowledged as something of a turnaround specialist, one recruiter, who requested anonymity, said he wondered whether Messrs. Oristaglio and Haldeman could create a more collaborative investment culture at Putnam, which is now considered to be fairly competitive and combative.
"It's a pretty interesting move for both sides," said Christopher J. Acito, managing director at consulting firm Casey, Quirk & Acito LLC, Darien, Conn. "Ed Haldeman played such an instrumental part in bringing Delaware to where it is, but its revival still isn't what you might call a home-run success. But it's got to be a big loss for Delaware. As for Putnam, Mr. Haldeman is not an insider, and that can be an important factor in that culture."
Recruiters also noted that the retirement of John C. Hobbs, co-founder, CEO, chairman and 33-year veteran of Jennison Associates, New York, created an opportunity for Dennis Kass to move over from crosstown rival J.P. Morgan Fleming Asset Management, New York, to succeed Mr. Hobbs. Mr. Kass was vice chairman and chief fiduciary officer at J.P. Morgan Fleming.
Time is the key in judging whether these people succeed in their new jobs, said recruiter Ashton McFadden, managing director, Beacon Search Group LLC, New York.
"It's hard to tell without a year under their belts whether new money management executives will succeed. It's at a year that ... you know whether the company picked the right candidate for the job," Mr. McFadden said.
The right choice
Many industry observers expect that New York-based Citigroup Inc.'s appointment of Sallie L. Krawcheck as CEO and chairwoman of a newly established, independent research unit, Smith Barney, would turn out to be the right choice. Ms. Krawcheck was chairwoman and CEO of the research department at crosstown research rival Sanford C. Bernstein.
"Citi is trying to get away from its investment banking activities and wants to show that its research department is indeed free of influence," said Alex Thompson, head of the Boston-based wealth and asset management practice of recruiters Whitehead Mann PLC. "Bernstein, thought to be the least biased of research shops, was a good place" from which to hire, he said.
Among the other noteworthy personnel moves at money management firms:
* Brian Storms became CEO of the Americas at UBS Global Asset Management, Chicago, then terminated a number of senior marketing, client service and distribution staff. Mr. Storms was president and COO. He succeeds Benjamin F. Lenhardt Jr., who will retire in December.
* Mark Whiston was named CEO of Janus Capital Group Inc., Denver, replacing Tom Bailey and Landon Rowland, both retired. Mr. Whiston was a marketing veteran at the company and was president of retail and institutional services.
* Neuberger Berman Inc. replaced its entire Boston-based growth equity team with a Chicago team that was lifted out of Northern Trust Global Investors. Jon D. Brorson leads the team.
* Northern Trust did a liftout of its own, luring Glenn Migliozzi to become its head of fixed income in Chicago, from a similar job at Fleet Investment Advisors, Boston.
* Andreas Utermann was named global CIO for equities at Allianz Dresdner Asset Management, London. Mr. Utermann was global head of equities in the London office of Merrill Lynch Investment Managers.
* Principal Capital Management, Des Moines, named Jim McCaughan executive vice president and global head of asset management. He had been head of Credit Suisse Asset Management, New York. Gloria D. Reeg made the leap from consulting to money management when she accepted the post of president of Principal Capital Income Investors, the insurer's fixed-income shop. Ms. Reeg was managing director, global consulting, at Frank Russell Co., Tacoma, Wash.
Recruiters also noticed pronounced talent upgrade efforts at a number of endowments and foundations and specialty managers serving that market niche, including Lyn Hutton becoming CIO of Commonfund Inc., Wilton, Conn. Ms. Hutton replaced Todd Petzel, who left to start a hedge fund company. Ms. Hutton was vice president and chief financial officer of the John D. and Catherine T. MacArthur Foundation, Chicago.
Another MacArthur alum, William H. McLean, became vice president and CIO of Northwestern University, Evanston. He replaced David Wagner, who retired.
Among the biggest moves at pension funds was Fred R. Buenrostro Jr. becoming the seventh executive director of the California Public Employees' Retirement System, Sacramento, the nation's largest pension fund. Mr. Buenrostro was chief deputy director of the California Department of Personnel Administration, Sacramento; he replaced James Burton, who became CEO of the World Gold Council, London.
Also, Enos Throop Jr. was named CIO of the new National Railroad Retirement Investment Trust, Washington. He had been director-investments of the United Mineworkers of America Health and Retirement Funds, Washington.