Four SSgA execs depart

Four senior SSgA executives are leaving the firm, roughly six months after Scott Powers became president and CEO.

Peter G. Leahy, executive vice president and chief product officer; Roger Petrin, senior managing director and head of the global trading and implementation groups; Klaus Esswein, senior managing director and head of SSgA’s German and Swiss units; and Jean-Francois Schock, senior managing director and head of SSgA’s Europe, Middle East and Africa strategic growth group, are all leaving, confirmed spokeswoman Marie McGehee.

She declined to say why, and said she has no information about their plans.

The responsibilities of Messrs. Leahy, Petrin and Schock will be distributed to other members of SSgA’s executive management team.

Wolfgang Hotzendorher, a managing director with SSgA’s German unit, will assume Mr. Esswein’s responsibilities, Ms. McGehee said. Ruediger Zeppenseld, who became interim managing director of SSgA’s Swiss office when Josef Bossi departed earlier this year, will continue to head that office.

Also, SSgA will disband its global fundamental equity team by the end of the year so the company can focus on areas of core strength, including cash management, index and active/enhanced quantitative strategies, Ms. McGehee said.

The team managed $436 million, mostly in institutional, as of June 30. The team’s 20 investment positions will be eliminated by the end of the year, Ms. McGehee said.

General Motors is being monitored by the PBGC “as financial reports come in,” said Jeffrey Speicher, PBGC public affairs specialist.

“We will be looking with great concern as financial reports come in,” he said. “We aren’t sending out any flares or raising any panic.”

On Oct. 9, S&P put the bond ratings of GM and its finance unit, GMAC, on negative credit watch. GM’s stock plunged 31% on Oct. 9 to close at $4.76. On Oct. 10, the stock closed up 0.13 at $4.89.

“From our point of view, it is difficult to say what the impact (of the market turmoil) is” on the plan, Mr. Speicher said.

GM’s defined benefit plan was $9 billion overfunded, based on assets of $117 billion and accumulated benefit obligations of $108 billion, as of Dec. 31, according to a Milliman report.

ATP pension fund offered 30 billion kroner ($5.4 billion) to the Danish banking system as part of a government-led initiative to stabilize the nation’s financial sector, said Bjarne Graven Larsen, CIO of the 431.3 billion kroner fund.

The Danish parliament on Oct. 10 passed an emergency measure that offers a blanket guarantee on all bank deposits, including senior debt securities, retroactive to Oct. 5, through Sept. 30, 2010. As part of the bill, all banks would contribute to a fund initially valued at 35 billion kroner to cover losses.

As a way to help boost liquidity in the banking industry “purely on commercial terms,” ATP officials agreed to a bond repo transaction, in which part of the fund’s bond portfolio is lent to the banks for two years, Mr. Larsen said.

“This is a way for us to enhance the returns on the bond portfolio without additional risk,” Mr. Larsen said. “We didn’t have to sell off any of the actual securities.”

Mr. Larsen expects other Danish and international pension funds will follow suit. He declined to specify the financial terms of the agreement.

The $7 billion Arizona Public Safety Personnel Retirement System hired NEPC as its general consultant, pending contract negotiations, confirmed James Hacking, system administrator.

The firm replaced Ennis Knupp, which resigned in June, Mr. Hacking said.

NEPC will assist with searches and help establish new investment policies that will specify the system’s asset allocation. The consultant also will specify new benchmarks the fund will use to measure performance, Mr. Hacking said.

AllianceBernstein, Invesco and Franklin Templeton all reported drops in assets on the back of weak equity markets in September.

AllianceBernstein reported $590 billion in assets as of Sept. 30, down 12.6% from the previous month and 27% below a year earlier, confirmed spokesman John Meyers. The decline was primarily the result of negative investment returns as well as net outflows in all distribution channels. Mr. Meyers would not elaborate.

Invesco’s total assets as of Sept. 30 were $409.6 billion, down 8.9% from August and down 11.2% from the previous quarter, primarily driven by outflows from money-market accounts.

Franklin’s assets totaled $507.2 billion on Sept. 30, down 10% from a month earlier and down 12.6% from the previous quarter.

Michael Kim, associate director and analyst at Sandler O’Neill, estimates anywhere between $5 billion and $7 billion of Franklin’s asset decline can be attributed to retail client outflows in September as some of Franklin’s flagship Templeton funds posted weak returns.

Invesco spokesman Ivy McLemore and Franklin spokesman Matthew Walsh declined to comment.

Developer Leslie Dick Worldwide filed a RICO complaint against 17 parties, including Donald Trump, financier George Soros, Fortress Investment Group and Cerberus Capital Management, over the 2003 sale of the General Motors Corp. Building.

The suit, filed last month in the U.S. District Court in New York, revolves around the 2003 sale of the GM Building by Conseco Inc. and Mr. Trump to Macklowe Properties Inc. Macklowe sold the building in May 2008 to a group led by developer Mortimer Zuckerman, Goldman Sachs Group Inc., and the governments of Qatar and Kuwait for $2.9 billion — the highest price ever paid for a U.S. office building.

“Through unlawful means, including but not limited to money laundering, bankruptcy fraud and bid rigging, (some of the defendants) acquired Conseco’s prime assets, including Conseco Finance and the General Motors Building in New York City, and thereafter attempted to conceal their illicit activities,” according to a statement from the David H. Relkin law firm, which represents Leslie Dick Worldwide.

Mr. Relkin said in an interview the case was “based on new evidence discovered recently,” adding that it included parties “involved in the bankruptcy of Conseco.”

The suit alleges violations of the federal Racketeering Influenced and Corrupt Organizations Act by a number of investors in the property, including Mr. Trump, Soros Fund Management, Vornado Realty Trust and German American Capital, as well as a number of firms involved in the financing of the 2003 sale to Macklowe, including Fortress Investment Group, Deutsche Bank, Lazard, and Cerberus Capital Management.

None of the defendants could be immediately reached for comment, but Mr. Soros had denied such allegations in the past.

Bill McHugh joined Dominion Resources as assistant treasurer, asset management, confirmed spokesman Ryan Frazier. Mr. McHugh will be responsible for managing employee-benefit related assets, including the company’s $5.1 billion defined benefit fund. He replaces Don Borneman, who retired.

Mr. McHugh was chief pension strategist for JPMorgan Asset Management. Information on his replacement was not available.

Moody’s Investors Service downgraded its rating on Legg Mason’s senior debt to A3 from A2, citing rising costs the firm has incurred to support the net asset value of money-market funds managed by affiliate Western Asset Management, and continued “significant” outflows of long-term assets.

In a news release, Moody’s said Legg Mason currently has ample cash to support its money-market funds, but expressed concern that “additional significant costs” could at some point pressure the firm to raise further capital. The rating agency warned that further downgrades were possible if the firm’s excess liquidity becomes depleted or if long-term client outflows accelerate.

In a statement, CFO Charles J. Daley Jr. said Legg Mason remains “well positioned to manage ongoing volatility in the financial markets, as is reflected in our solid investment-grade rating,” He added that Legg Mason has ample capital to support its money-market funds.

Mike Phillips, chairman of Russell Investments, will retire at the end of the year, confirmed spokeswoman Jennifer Tice.

Mr. Phillips joined Russell in 1981 in the firm’s London office, served as CEO from 1993 to 2003, and has been chairman since then.

Mr. Phillips will continue as chairman of Russell 20-20, a non-profit association of 20 retirement plans and 20 money managers that “explores the economic and investment environments in emerging markets around the world,” according to a news release. Mr. Phillips also will launch an investment advisory firm in Geneva, Switzerland, that will offer Russell products. Ms. Tice could not provide further details, and Mr. Phillips was not immediately available for comment.