Big changes coming at GM Asset
Skip to main content
pilogo-NEW
Subscribe
  • Subscribe
  • My Account
  • login
  • NEWS
    • Asset owners and the coronavirus
    • Alternatives
    • Consultants
    • Coronavirus
    • Defined Contribution
    • ESG
    • Frontlines
    • Hedge Funds
    • Investing / Portfolio Strategies
    • Money Management
    • Pension Funds
    • People Moves
    • Private Equity
    • Real Estate
    • Searches & Hires News
    • SECURE Act
    • Special Reports
    • WorldPensionSummit
    • Ron Schmitz
      Pandemic drives faster transition for Virginia to private markets
      Mubadala Investment Co. logo
      Mubadala draws on portfolio in coronavirus fight
      T.J. Carlson
      Texas Muni reduces downside risk during pandemic, finding opportunities now
      Scott Davis
      ‘Triage plan’ at Indiana system helped stem losses
    • CI Financial launches global real estate, infrastructure joint venture
      Tina Byles Williams
      Xponance, Investcorp link up to give diverse alts managers a boost
      MidOcean taps 2 for investor relations team
      Erik Hirsch
      Russell’s deal with Hamilton Lane about forming ‘strategic partnership’
    • Hub International agrees to buy Plan Sponsor Consultants
      Aon names public markets solution leader
      Deloitte to acquire Sydney-based consulting firm Rice Warner
      Jo Holden
      Mercer picks new global head of investment research
    • Jerome Powell, chairman of the Federal Reserve, listens during a Senate Banking Committee hearing in Washington on Dec. 1, 2020
      Fed saw some time before taper conditions met – minutes
      International Monetary Fund and World Bank spring meetings signage at the IMF headquarters in Washington
      IMF upgrades global growth forecast, warns of diverging recoveries
      A cashier standing behind a protective barrier assists a customer at a Peter Harris Clothes store in Latham, N.Y.
      Job growth tops 900,000 in March as hiring broadens
      Duncan Bonfield, CEO of IFSWF
      Institutional investors putting risk back on the table – report
    • Economic Group Pension Services scoops up third-party administrator
      OregonSaves gathers $100 million in assets
      Treasurer: CalSavers hits 10,000-plus in employer sign-ups
      Wisconsin Deferred Compensation cutting American Beacon fund from lineup
    • 2 standards better than 1 when it comes to ESG reporting – research
      Girls Who Invest aims for diversity
      Investors press Berkshire Hathaway on climate action
      U.K. pension regulator warns plans on climate disclosures
    • Ken Griffin
      Ken Griffin donates $5 million to give Miami students internet
      New book culls institutional wisdom from podcast series
      Fearless Girl
      SSGA’s Fearless Girl statue now shattering glass ceiling
      Tangen video
      Norges chief dons chef’s hat to boost employees’ spirits
    • Hedge funds post best first-quarter return since 2000
      Jason Kephart
      Managers see good times ahead in 2021
      Jev Mehmet, CEO of Brevan Howard's Coremont unit
      Brevan Howard runs $50 billion unit like BlackRock’s Aladdin
      A sign outside a Credit Suisse Group bank branch in Murten, Switzerland
      Credit Suisse, Nomura slump as banks tally Archegos damage
    • CalSTRS puts $1 billion into 2 BlackRock low-carbon strategies
      U.S. bonds have worst quarterly return since 1981
      Norway wealth fund should reduce equity universe – report
      Hedge funds post best first-quarter return since 2000
    • Former Winton executive joins digital asset trading firm
      Michael Dommermuth, chief executive officer of Manulife Asset Management speaks at the Bloomberg Markets Most Influential Summit in Hong Kong in 2015
      Manulife, Samsung Asset Management to cooperate on S. Korea opportunities
      Hamilton Lane puts 3 in charge of fund investment amid promotions
      two businessmen seal deal with handshake over table with documents, laptop, table, smartphone and documents
      Future Planet Capital acquires venture capital firm Midven
    • Pennsylvania State Capitol, Harrisburg
      PennPSERS subject of probe into fiscal-year return data
      Florida Senate bill seeks to close state pension plan to most new hires
      A foreign currency dealer on a telephone in a dealing room of Hana Bank in Seoul
      S. Korea tweaks NPS domestic equity target ranges
      NISA index ticks down in March, as funding gains
    • Former Winton executive joins digital asset trading firm
      Hamilton Lane puts 3 in charge of fund investment amid promotions
      TimesSquare Capital taps ISS veteran for ESG post
      Carl Pettersson
      Finland’s Elo chooses next CEO
    • Hand typing on stationary iPhone at an office reception desk
      Private equity’s taste for tech spurs $80 billion deal spree
      Vista Equity promotes 2 to leadership roles on 2 funds
      Azimut takes minority stake in HighPost
      Bills of euro, dollar and pound currencies, among others
      Ardian acquires Bregal’s stake in Freshstream fund
    • CalSTRS indutrial property
      Investors hungry for industrial properties
      Tim Wang
      GLP names co-president of logistics, industrial real estate for China
      Frank Forster
      StepStone Real Estate adds managing director for Europe
      Christine Iacoucci
      BentallGreenOak promotes from within to fill Canadian CIO role
    • Andy Schreiner
      New PEPs targeting firms without retirement plans
      Jackie Walorski
      Contribution catch-up for caregivers gaining favor
      Retirement cartoon
      Hopes rising for retirement readiness in 2021
      Neal and Brady
      Retirement security could be only issue both sides accept
    • Corporate pension contributions
      Eddy Awards 2021
      COVID-19: One year in
      Charging Bull, sometimes referred to as the Wall Street Bull or the Bowling Green Bull, a bronze sculpture that stands on Broadway just north of Bowling Green in the Financial District of New York City
      Top-performing managers Q4 2020
    • U.S. still a key market for investors
      Collected coverage of P&I's 2020 WorldPensionSummit
      Pedestrians pass a large advertisement on the Arndale Center shopping mall reading 'Act now to avoid a local lockdown' in Manchester, England
      COVID-19 puts new opportunities and risks on the agenda - WPS panelists
      Screens display stock price information over the trading floor of the NYSE Euronext exchange in Paris
      Private assets will continue to grow in portfolios – WPS panelists
  • Data
    • Research Center
    • Searches & Hires Database
    • Searches & Hires News
    • RFPs
    • Charts / Infographics
    • Sponsored Research
    • Trackers
    • Q2 2020 searches and hires overview report
      Q2 2020 money manager M&A activity summary
      Q2 2020 legal overview report
      Q1 2020 searches and hires overview report
    • Q1 2021 searches and hires overview report
      New Jersey hires 2 alts consulants
      CalSTRS puts $1 billion into 2 BlackRock low-carbon strategies
      Phoenix DC plans stick with Morley for stable value
    • Q1 2021 searches and hires overview report
      New Jersey hires 2 alts consulants
      CalSTRS puts $1 billion into 2 BlackRock low-carbon strategies
      Phoenix DC plans stick with Morley for stable value
    • Passive Investment Management Services
      Active Extended Global Credit Manager Search
      Actuarial Services
      Investment Management Services
    • U.S. bonds have worst quarterly return since 1981
      Stable value retains edge over money market funds
      Taiwan Semiconductor’s No. 1 in the emerging markets book
      U.S. fixed-income returns post another positive year
    • Institutional Investors: Shared Expectations, Divergent Paths
      Global Investor Study 2016
      Workplace Financial Wellness
    • U.S. Endowment Returns Tracker
      Pension Fund Returns Tracker
      Earnings Tracker
      Corporate Pension Contribution Tracker
  • Insights
    • Opinion
    • White Papers
    • Industry Voices
    • Letters to the Editor
    • Partner Content
    • Publisher's Update
    • CalPERS cartoon
      Urgency underscores CalPERS' search for a CIO
      Multiemployer plans cartoon
      Money — but no fixes — for multiemployer plans
      Vaccination cartoon
      Rallying to meet the ongoing COVID-19 challenge
      Tesla cartoon
      Don’t confuse wealth creation with retirement saving
    • China: the outlook is bright for longer-term investors
      Finding Differentiation in Securitized Assets
      Bipsync Client Stories: RMS in Action at Pensions and Superannuation Funds
      Green and sustainable bonds in emerging markets
    • Greg Shea and Steven Kindred
      Commentary: The solution for yield-seeking allocators may be hiding in plain sight
      Jim Park
      Commentary: Asian Americans, Pacific Islanders face ‘bamboo ceiling’ in money management
      Jared Gross
      Commentary: Anchors and allocations – breaking the grip of 60/40
      Peter Marber
      Commentary: Is it time for an emerging markets rally?
    • Writer using a typewriter
      OCIO industry needs to adopt GIPS
      Writer or journalist workplace. stock illustration
      Even as it assails China, Trump administration emulates it
      Skeptical of Main Street support for proxy adviser proposal
      Focus on manager diversity pushes asset owners’ to walk the talk
    • P&I Content Solutions
      Research for Institutional Money Management
      P&I Content Solutions
      Top questions for institutional investors
      Sponsored Content By Newton Investment Management
      Growth and Innovation in Emerging Markets
      P&I Content Solutions
      In Challenging Markets, Systematic Global Macro Strategies Could Hold Opportunity
    • Help us help you by supporting quality journalism
      You Must Believe in Spring
      Everything Must Change
      Tomatoes & Investments
  • Multimedia
    • Videos
    • Webinars
    • Polls
    • Slideshows
    • Charts / Infographics
    • watch video
      1:23
      The passive fixed-income glut
      watch video
      1:38
      Is it time for DC plans to embrace private equity?
      watch video
      5:39
      The coronavirus pandemic: One year later
      watch video
      0:45
      Private funds weathered 2020 turmoil
    • Understanding the PEP Evolution
      Divest or engage?
      New Outlook on Income: A Framework for Evaluating DC Retirement Income Solutions
      Innovations in DC: Helping supercharge retirement outcomes
    • POLL: The Biden infrastructure plan
      POLL: Retirement income solutions
      POLL: Working after the pandemic
      POLL: The year ahead for the 1,000 largest U.S. retirement funds
    • view gallery
      9 photos
      Coronavirus and the markets
      view gallery
      22 photos
      The 1,000 largest retirement funds: 2020
      view gallery
      10 photos
      Outlook 2020
      view gallery
      10 photos
      2019 as seen through the eyes of Roger
    • U.S. bonds have worst quarterly return since 1981
      A lost decade for funded status
      Graphic: The passive fixed-income glut
  • Events
    • Conferences
    • Webinars
    • DC Investment Lineup Virtual Series
      ESG Investing Virtual Series
      Private Markets Virtual Series
    • Understanding the PEP Evolution
      Divest or engage?
      New Outlook on Income: A Framework for Evaluating DC Retirement Income Solutions
      Innovations in DC: Helping supercharge retirement outcomes
  • Careers
  • Research Center
MENU
Breadcrumb
  1. Home
  2. Print
March 21, 2005 12:00 AM

Big changes coming at GM Asset

Virginia’s Everett named firm’s CIO; 51% of private equity unit goes to management

Arleen Jacobius
Vineeta Anand
  • Tweet
  • Share
  • Share
  • Email
  • More
    Reprints Print

    Nancy Everett, chief investment officer of the $40 billion Virginia Retirement System, Richmond, will be named CIO of General Motors Asset Management Corp., Pensions & Investments has learned.

    In another big development, GMAM is selling a majority interest in its $6 billion private equity business — one of its best-performing internally managed asset classes — to the group's management team. W. Allen Reed, president and chief executive officer of GMAM, New York, said the private markets team, led by Managing Director Charles Froland, will own 51% of the new firm. GMAM will own 49%.

    Mr. Reed is expected to announce Ms. Everett's hiring on March 21. She will begin work June 1. Although Ms. Everett's position is new, sources say her job will include some of the duties handled by Myra Drucker, but will entail broader investment responsibilities. Ms. Drucker, managing director for marketing and business development and CIO of GM Trust Bank, left last year.

    Jerry Dubrowski, a spokesman for GMAM, declined to comment on Ms. Everett's hiring. "We have nothing to announce, and as a matter of course, we don't comment on speculation," he said. GMAM has $141.3 billion under management, according to its most recent filing with the federal government.

    Ms. Everett confirmed she is moving to GMAM, but declined to discuss what her new job might entail. She has been with VRS since 1979, and was CIO since 1998. Officials there have not yet determined how to replace her.

    "She's running an organization with $40 billion under management and she's done an outstanding job. She's widely regarded and highly respected for her investment performance," said Henry Higdon, partner in the New York executive search firm Higdon Barrett LLC, who said he worked on placing Ms. Everett at GMAM.

    Mr. Higdon said that Ms. Everett's lack of experience in a corporate investment management job did not matter.

    "She's a leader in the investment world, period."

    He declined to comment on what Ms. Everett would be paid in her new position. "She'll be nicely rewarded for carrying out such a senior role," he said.

    Expanding client base

    Meanwhile, the sale of the private equity business was done primarily to retain the current investment team and to expand the business' client base, Mr. Reed said

    The deal had been in the works for about a year; terms were not disclosed.

    Private equity is a long-term, relationship-based asset class, Mr. Reed said; keeping Mr. Froland and his five senior portfolio managers was important.

    The move will also allow the private equity team to expand beyond GM-related investors. And it enables the business to earn more money because it can charge non-GM investors more than it can charge GM.

    "Going forward, they will build their business to include investors that are not related to GM," Mr. Reed said.

    General Motors Corp.'s $91 billion pension fund is a huge chunk of GMAM's assets under management, Mr. Reed said. GMAM also manages the pension plans of Xerox Corp., as well as two former GM subsidiaries, Delphi Corp. and DirectTV, formerly Hughes Electronics.

    One of the advantages of spinning off into a separate firm is the "ability to diversify the client base to assure long-term stability in investment practice," Mr. Froland said.

    "The company expects to add clients on a measured pace to take advantage of a wide variety of global private market opportunities from venture capital, buyout, distressed and turnaround opportunities and other strategies.

    "The company will focus exclusively on private market investing and will be able to expand its resources to support a larger investment practice that can independently serve a variety of clients," he said.

    The new firm — Performance Capital Management LLC — will be based in Greenwich, Conn., and will open in May.

    GMAM to be investor

    GMAM will be an investor in the new company's funds, and GM will have three seats on the firm's seven-member board, Mr. Reed said.

    Executives of the new firm expect to pursue both pooled and separate client investment opportunities, Mr. Froland said. The team currently manages a fund that invests directly in companies on a co-investment basis with other buyout or venture capital funds, as well as a private equity fund of funds.

    Mr. Reed said GMAM executives consider the sale a positive move because private equity is different from other asset classes. Investors commit capital for each fund for about 10 years, he said. Other asset classes do not require such a long-term investment

    "Our team has done an outstanding job. Retention is an important part of the business in private equity, and we want the same people around at the end that were there at the beginning."

    GMAM has been investing in private equity for about 10 years, and with the same team for the past six years, but it didn't accept outside investors until 2001.

    He said GMAM executives are not considering spinning off the firm's hedge fund or real estate businesses.

    Moving beyond GM-related investors will also increase the private equity business' fee-earning power, Mr. Reed said. The private equity group will be able to charge non-GM investors a market-based fee, Mr. Reed said. Under the Employee Retirement Income Security Act, an affiliate cannot charge an ERISA plan more than cost. Because about 90% of GMAM assets are from the GM pension plan, he said, fees for private equity and other classes have been below market.

    Participate in success

    Another factor motivating the split is staffers' desire to participate financially in the success of the business they've been growing.

    While at GMAM, the private equity group participated in some of the profits of the funds they managed, but as a separate firm, the team will be owners.

    "The company will provide greater economic alignment for the management team and an opportunity to participate in the success of the business," Mr. Froland said.

    The private equity business has been one of GMAM's best-performing asset classes, Mr. Reed said. In 2004, the GM pension fund earned an overall return of 14%; the private equity investments returned more than 20%, and the hedge fund earned 7%. (GMAM doesn't release its returns but does use the General Motors Corp. pension fund return as a public proxy.)

    "It was one of the best years we ever had" for the private equity," he said.

    GMAM's existing co-investment fund, the $700 million GM Capital Partners I LP, is 85% invested. It drew $100 million commitments from each of three large outside pension investors: the C$75.2 billion (US$62.6 billion) CPP Investment Board, Toronto; the C$35.7 billion Ontario Municipal Employees Retirement Board, Toronto; and the $117 billion New York State Common Retirement Fund, Albany. GM's pension fund committed $300 million.

    Its newest fund, the $150 million GM Capital Partners Fund of Funds I LP, is just getting started, Mr. Froland said. So far, none of the three outside investors in the first fund has invested in the new one.

    Calls to the officials at the three pension funds were not returned by press time.

    The new private equity firm will also be managing the illiquid portion of GMAM's distressed debt business, Mr. Reed said.

    "We have illiquid distressed debt in the form of limited partnerships, which will be managed by the joint venture," he said. "Other distressed debt is more liquid and is managed by the global fixed-income group in separate accounts."

    Recommended for You
    Read the print edition of P&I
    Read the print edition of P&I
    Citadel's Ken Griffin gives $125 million to Chicago museum; name will change
    Citadel's Ken Griffin gives $125 million to Chicago museum; name will change
    Gender diversity is improving on FTSE 350 boards
    Gender diversity is improving on FTSE 350 boards
    Innovations in DC: Helping Supercharge Retirement Outcomes
    Sponsored Content: Innovations in DC: Helping Supercharge Retirement Outcomes
    sponsored
    Events
     
     
    Sponsored
    White Papers
    COVID-19 Makes LP Portfolio Management More Important Than Ever
    Green and sustainable bonds in emerging markets
    Finding Differentiation in Securitized Assets
    Bipsync Client Stories: RMS in Action at Pensions and Superannuation Funds
    Portfolio Protection: One Size Fits None
    China: the outlook is bright for longer-term investors
    View More
    Sponsored Content
    Partner Content
    The Industrialization of ESG Investment
    For institutional investors, ETFs can make meeting liquidity needs easier
    Gold: the most effective commodity investment
    2021 Investment Outlook | Investing Beyond the Pandemic: A Reset for Portfolios
    Ten ways retirement plan professionals add value to plan sponsors
    Gold: an efficient hedge
    View More
    E-MAIL NEWSLETTERS

    Sign up and get the best of News delivered straight to your email inbox, free of charge. Choose your news – we will deliver.

    Subscribe Today
    April 5, 2021 Page One

    Get access to the news, research and analysis of events affecting the retirement and institutional money management businesses from a worldwide network of reporters and editors.

    Subscribe
    Connect With Us
    • RSS
    • Twitter
    • Facebook
    • LinkedIn

    Our Mission

    To consistently deliver news, research and analysis to the executives who manage the flow of funds in the institutional investment market.

    pilogo-NEW
    About Us

    Main Office
    685 Third Avenue
    Tenth Floor
    New York, NY 10017-4036

    Chicago Office
    150 N. Michigan Ave.
    Chicago, IL 60601

    Contact Us

    Careers at Crain

    About Pensions & Investments

     

    Advertising
    • Media Kit
    • P&I Content Solutions
    • P&I Careers | Post a Job
    • Reprints & Permissions
    Resources
    • Subscribe
    • Newsletters
    • FAQ
    • P&I Research Center
    • Site map
    • Staff Directory
    Legal
    • Privacy Policy
    • Terms and Conditions
    • Privacy Request
    Pensions & Investments
    Copyright © 1996-2021. Crain Communications, Inc. All Rights Reserved.
    • NEWS
      • Asset owners and the coronavirus
      • Alternatives
      • Consultants
      • Coronavirus
      • Defined Contribution
      • ESG
      • Frontlines
      • Hedge Funds
      • Investing / Portfolio Strategies
      • Money Management
      • Pension Funds
      • People Moves
      • Private Equity
      • Real Estate
      • Searches & Hires News
      • SECURE Act
      • Special Reports
      • WorldPensionSummit
    • Data
      • Research Center
      • Searches & Hires Database
      • Searches & Hires News
      • RFPs
      • Charts / Infographics
      • Sponsored Research
      • Trackers
    • Insights
      • Opinion
      • White Papers
      • Industry Voices
      • Letters to the Editor
      • Partner Content
      • Publisher's Update
    • Multimedia
      • Videos
      • Webinars
      • Polls
      • Slideshows
      • Charts / Infographics
    • Events
      • Conferences
      • Webinars
    • Careers
    • Research Center