Andrew Carter, father of active bond management

Andrew M. Carter — the father of active bond management who also created the first bond index fund and was considered “one of the finest math guys” in fixed income — built a clientele of some of the biggest corporate pension funds.

He worked at leading investment advisory companies as well as founding two of his own money management firms.

Mr. Carter, who was 74, died Oct. 17 at his home in Boston.

“Bill Gross had called him the father of active bond management,” said Renee Krimsier Carter, his wife, recalling William H. Gross introducing Mr. Carter at a conference. Mr. Gross adapted Mr. Carter's concept to his own fixed-income management style and went on to become a legendary investor, according to “The Money Flood,” a book by Michael J. Clowes, editor-at-large, Pensions & Investments.

Mr. Carter began his fixed-income money management career as assistant bond manager at the Harvard University treasurer's office from 1964 to 1968, managing the Harvard endowment's then-$500 million bond portfolio, according to “The Money Flood.”

He left Harvard in 1968 to join Thorndike Doran Paine & Lewis Inc., a unit of Wellington Management Co., a Boston-based money management firm, helping to create its fixed-income investment management.

When he left Thorndike/Wellington in 1972, he help found Standard & Poor's/Carter Doyle Inc., one of the first money management firms to specialize in active bond management, according to “The Money Flood.”

At the firm, he proposed the creation of one of the first bond indexes that resulted in the development of the Salomon Brothers High Grade Corporate Bond Total Rate of Return index.

In 1975, he left the S&P firm and joined Jennison Associates, New York, where he led the bond department and became senior vice president, according to his death notice.

At Jennison, Mr. Carter created the first bond index fund, said Ronald J. Ryan, founder and CEO of Ryan ALM Inc. It was for the New England Telephone & Telegraph Co. pension fund, said Mr. Ryan, who was then director of fixed-income research at Lehman Brothers. With Jennison a client of Lehman, Mr. Carter worked with Mr. Ryan. For the index fund, Mr. Carter used the Lehman Brothers Government/ Corporate Bond index, Mr. Ryan said.

“In bond land you are dealing with complicated math,” Mr. Ryan said. Mr. Carter “was one of the geniuses who understood bond math ... which is the key to fixed income,” he said.

“He was an innovator,” Mr. Ryan added.

In 1992, Mr. Carter left Jennison to form Andrew M. Carter & Co. LP, a Boston-based fixed-income investment management firm whose clients in the 1990s included the pension funds of BellSouth Corp. and Bank of America Corp.

In 1998, he closed that firm and joined Hyperion Capital Management Inc., New York, as chairman and CEO, with most of his clients following him to the new firm, a Hyperion statement at the time said.

As part of the move, Lewis S. Ranieri, a pioneer in developing asset-backed securities, stepped down as Hyperion's chairman to become vice chairman.

In 2006, Hyperion Capital Management changed its name to Hyperion Brookfield Asset Management Inc. after it was acquired by Brookfield Asset Management. Mr. Carter continued as a senior adviser at Hyperion until 2010.

“A former colleague of Mr. Carter considered him to be "one of the finest math guys' in the business, further stating, "Andy understands the math of bonds, the quirks of bonds,'” according to the death notice. “Mr. Carter so loved what he did that he refused to call it work.”

Mr. Carter was a trustee up until his death and a longtime chairman of the investment committee of the Windsor, Conn.-based Loomis Chaffee School, which currently has a $178 million endowment fund, said Mary Forrester, director of digital communications at the school.

Among his other activities, he had been a member of the board of the New England Conservatory, Boston, where he was at one time chairman of its investment committee, which oversees the school's endowment fund, currently at $115 million, said Ellen Pfeifer, NEC senior communications specialist. Ms. Carter said he was also a trustee of the William E. Simon Graduate School of Business Administration, University of Rochester, and noted that Mr. Simon, when he was U.S. treasury secretary, sought Mr. Carter's advice.

Mr. Carter was born in 1940 in Englewood, N.J. His academic underpinning belied his professional accomplishments. He graduated from Harvard College with an A.B. in English literature and honors in physics, according to the death notice and the book.

“Andy loved poetry, history, literature, art, horses, golf,” Mrs. Carter said. “He had a probing intellect. ... He used to drive a 1957 Bentley convertible around Vermont with his coat, tie and cap on.”

Aside from Mrs. Carter, who is an adjunct faculty member of the New England Conservatory, Mr. Carter's survivors include his son, James P. Carter.

A reception will begin at 10 a.m. and memorial service at 11 a.m. Nov. 8 in the chapel of Founders Hall at The Loomis Chaffee School.

In lieu of flowers, the family requests donations to The Loomis Chaffee School, 4 Batchelder Road, Windsor, CT 06095.