“We had an institutional franchise that didn't have sufficient resources outside of the U.S.,” said Mr. O'Brien, managing director and global head of J.P. Morgan Asset Management's institutional client group, in a recent interview. As a result, institutional businesses outside the U.S. had evolved within larger regional retail businesses, because retail was where the firm could find better growth and profit margins.
“What I've tried to do is bring all of those out, from a governance point of view, and create one global institutional business,” he said.
In large part, that's meant bulking up on talent.
Major positions that have been recently filled include:
• Ronald Nagel was named managing director and head of the Netherlands institutional business in Amsterdam, effective July 1. JPMAM snatched him from AllianceBernstein LP, where he was managing director-Benelux institutions. He is taking over from Brian Strange, a London-based vice president and client adviser who will retire in 2012. Mr. Nagel is expected to recruit three or four people for the Amsterdam office. “You can't cover the Dutch market with one person in London,” Mr. O'Brien noted.
• JPMAM added two new positions last fall to boost its relationships with sovereign wealth clients. Patrick Thomson became managing director and global head of sovereign clients, based in London. Mr. Thomson had been global head of client development at Ivy Asset Management. Also, Andrew Economos was named managing director and head of sovereign and institutional strategy for Asia (excluding Japan). Based in Hong Kong, he had been head of global investment opportunities at J.P. Morgan Private Bank. He reports to Mr. O'Brien.
• JPMAM also has boosted resources to its strategic investment advisory group despite the departure of Rumi Masih, managing director and global head of SIAG, in May. Peter Rappoport was named to replace him, reporting to Rebecca Patterson, managing director and chief markets strategist. Mr. Rappoport was a managing director in J.P. Morgan's fixed-income investment banking business. Mr. Masih left to become a senior investment strategist in the investment strategy and solutions group at BNY Mellon Asset Management.
• The firm also has chosen but not yet announced a new Singapore-based managing director and head of institutional sales in Southeast Asia effective July 1. With the recent retirement of David Hsu, CEO Asia Pacific, “there's a whole new leadership in the institutional business in Asia,” Mr. O'Brien said. Clive Brown, global chief operating officer for JPMAM, moved to Hong Kong this spring from London to take on the additional duties of chairman of Asia Pacific, replacing Mr. Hsu.
Also in May, Paul Sweeting was named managing director and European head of SIAG, a new position. Based in London, he reports to Mr. Rappoport. Mr. Sweeting will continue as a professor of actuarial science at the University of Kent, Canterbury, England.
“We're looking to add relationship and sales people in Switzerland, the Nordics and in the U.K.,” Mr. O'Brien said. “Across the board, we're looking to put more people on the ground because we just didn't have enough resources committed to the institutional business.”
Underlying the push to add resources is a desire to enhance the firm's solutions-based approach to client relationships, Mr. O'Brien said. “Some clients, all they want from you is what you manufacture” in terms of strategies and funds. “Increasingly, they want a deeper relationship. The larger clients, they want an advisory relationship ... (they see all the asset class expertise and say,) I want to be able to come and talk to you because of your expertise in this area.”
But outside the U.S., the JPMAM sales staff was stretched too thin to have higher-level conversations with clients, Mr. O'Brien said. Also, he's looking to boost the resources sales staff members can tap to better understand clients' needs — such as client-focused research done by SIAG — which can lead to multiasset and customized solutions mandates.
“Having a business where the relationship with the client is predicated on the performance of one product is not a great place to be, because when that product stops performing, it not only damages the product's reputation, you damage the firm's reputation as well,” Mr. O'Brien said. A scalable approach to customized solutions is “the institutional model of the future,” he said.