Scott Powers, CEO of Old Mutual’s U.S. businesses, was named president and CEO of State Street Global Advisors, effective sometime in May, said Arlene Roberts, SSgA spokeswoman. Mr. Powers, 48, replaces interim president and CEO James S. Phalen, who stepped in Jan. 3 after William W. Hunt resigned.
Mr. Hunt’s resignation was the highest profile of a spate of departures after an unprecedented bout of credit market turmoil that began last summer left a number of SSgA active fixed-income strategies suffering heavy losses. SSgA and its affiliates continue to face lawsuits from clients alleging the firm didn’t live up to its fiduciary duties.
Citing Financial Research Corp., Bloomberg reported that redemptions at SSgA rose to $21.3 billion in the first two months of the year. The unit had net inflows of $49.2 billion in 2007, not including money-market funds.
In February, SSgA appointed six senior executives to help oversee the investment unit’s global fixed-income division. The firm managed $259 billion in fixed-income assets on Dec. 31.
On April 4, the same day SSgA announced Mr. Powers’ appointment, Old Mutual said COO Thomas M. Turpin will be interim CEO until a successor for Mr. Powers is appointed. SSgA’s Mr. Phalen will return to his previous position as executive vice president and head of international operations for investment servicing, investment research and trading.
According to Bloomberg, Mr. Powers joined London-based Old Mutual, the U.K.’s third-biggest insurer, in 2001 to head its U.S. asset-management division. He became CEO of U.S. life-insurance and fund-management units in May 2006. During his seven years at Old Mutual, assets under management more than doubled to $333 billion, according to the company.
For Old Mutual, Mr. Powers’ departure could be coming at a difficult time, with the parent company looking to meet strong growth targets set for its asset management business, while finding synergies between its insurance and money management arms, observers said.
Industry veterans said at a moment when SSgA’s ties with clients have come under strain, the Boston-based giant is getting both a “strong leader” and a marketing veteran who understands the needs of clients.
David J. Bauer, a managing director with Casey Quirk & Associates, Darien, Conn., said that on an organizational level, State Street is “making a real statement” about its commitment to the asset management business by bringing in an industry veteran like Mr. Powers, as opposed to tapping another executive from parent State Street Corp.
Contact Douglas Appell at [email protected]
