Skip to main content
MENU
Subscribe
  • Subscribe
  • Account
  • LOGIN
  • Topics
    • Alternatives
    • Consultants
    • Coronavirus
    • Courts
    • Defined Contribution
    • ESG
    • ETFs
    • Hedge Funds
    • Industry Voices
    • Investing
    • Money Management
    • Opinion
    • Partner Content
    • Pension Funds
    • Private Equity
    • Real Estate
    • Russia-Ukraine War
    • SECURE Act 2.0
    • Special Reports
    • White Papers
  • Rankings & Awards
    • 1,000 Largest Retirement Plans
    • Top-Performing Managers
    • Largest Money Managers
    • DC Money Managers
    • DC Record Keepers
    • Largest Hedge Fund Managers
    • World's Largest Retirement Funds
    • Best Places to Work in Money Management
    • Excellence & Innovation Awards
    • WPS Innovation Awards
    • Eddy Awards
  • ETFs
    • Latest ETF News
    • Fund Screener
    • Education Center
    • Equities
    • Fixed Income
    • Commodities
    • Actively Managed
    • Alternatives
    • ESG Rated
  • ESG
    • Latest ESG News
    • The Institutional Investor’s Guide to ESG Investing
    • ESG Sustainability - Gaining Momentum
    • Climate Change: The Inescapable Opportunity
    • Impact Investing
    • 2022 ESG Investing Conference
    • ESG Rated ETFs
  • Defined Contribution
    • Latest DC News
    • DC Money Manager Rankings
    • DC Record Keeper Rankings
    • Innovations in DC
    • Trends in DC: Focus on Retirement Income
    • 2022 Defined Contribution East Conference
    • 2022 DC Investment Lineup Conference
  • Searches & Hires
    • Latest Searches & Hires News
    • Searches & Hires Database
    • RFPs
  • Performance Data
    • P&I Research Center
    • Earnings Tracker
    • Endowment Returns Tracker
    • Corporate Pension Contribution Tracker
    • Pension Fund Returns Tracker
    • Pension Risk Transfer Database
    • Future of Investments Research Series
    • Charts & Infographics
    • Polls
  • Careers
  • Events
    • View All Conferences
    • View All Webinars
    • 2022 Retirement Income Conference
    • 2022 Managing Pension Risk & Liabilities
    • 2022 WorldPensionSummit
Breadcrumb
  1. Home
  2. MONEY MANAGEMENT
April 18, 2016 01:00 AM

Looming exit of CIO is putting Vontobel under a microscope

Some funds terminate equity manager, others placing firm on watch

James Comtois
  • Tweet
  • Share
  • Share
  • Email
  • More
    Reprints Print
    Alex Gur
    Longtime deputy Matthew Benkendorf is taking the reins as Vontobel Asset Management's CIO.

    Several U.S. asset owners are either terminating their investments with Vontobel Asset Management Inc. or putting them on watch because of the upcoming departure of Rajiv Jain, co-CEO and chief investment officer of the money manager's “quality growth equities boutique.”

    Vontobel executives are hoping to assuage client fears by naming Matthew Benkendorf, Mr. Jain's longtime deputy, as his successor and explaining what the firm plans to do after Mr. Jain leaves in May.

    Recent examples of clients either dropping or considering replacing Vontobel include the $14.6 billion Illinois State Board of Investment, Chicago, which terminated Vontobel's managing of $534 million in active large-cap international equities.

    The $1.1 billion San Luis Obispo County (Calif.) Pension Trust, for which the manager runs about $130 million in international equity, is conducting a search for a possible replacement, but the trust hasn't determined whether a change will be made.

    Also, Oklahoma Police Pension & Retirement System, Oklahoma City, plans to issue an RFP for an emerging markets equity manager to replace Vontobel, which managed about $60 million in a similar strategy for the $2.1 billion pension fund.

    The $638 million Oklahoma City Employee Retirement System terminated Vontobel as manager of a $19.5 million emerging markets equity strategy in March.

    And the $1.2 billion Chicago Metropolitan Water Reclamation District Retirement Fund terminated Vontobel from managing a $61.8 million international large-cap equity strategy.

    Executives of all the asset owners cited Mr. Jain's departure from Vontobel as the reason for either terminating or considering terminating their relationship with the money manager.

    Vontobel Asset Management, a New York-based global investment management subsidiary of Zurich-based Vontobel Holding AG, has 69 employees and 26 investment professionals and $48.1 billion in assets under management. The quality growth equity strategy is run out of New York.

    Despite these client redemptions due to Mr. Jain's departure, a spokesman for Vontobel said the company is reorganizing how the strategy is being run.

    For starters, Mr. Benkendorf, a 17-year veteran of the firm, is taking over the CIO and portfolio manager roles.

    “Matt has been running the European and U.S. portfolios and has served as Mr. Jain's deputy for many years. Nothing is changing in terms of idea generation or portfolio implementation,” the spokesman said.

    Executives at Vontobel declined to comment.

    The spokesman added: “In terms of portfolio management, with Matt at the helm there might be changes in timing and sizing, but he is a very experienced portfolio manager with a proven track record.”

    The spokesman said Mr. Benkendorf intends to add other people to the 22-person team. Mr. Benkendorf doesn't have a fixed number of people to add in mind. Discussions about roles and responsibilities are being held right now and the company plans to make an announcement about team members as soon as possible.

    Mr. Benkendorf has also been named lead manager on some strategies, while Brian Bandsma and Donny Kranson also have been named as lead portfolio managers.

    Before Messrs. Bandsma and Kranson were appointed lead portfolio managers of Vontobel's Far East equity and European equity strategies, respectively, they both served as deputy portfolio managers to these strategies since 2013.

    The company is reaching out to clients and consultants to explain its new structure and approach. Mr. Benkendorf is meeting with clients to explain the investment team structure and strategy. The meetings that have been held so far have generally gone well, the spokesman said.

    Performance is not the issue. Vontobel's growth equity strategies returns have been stellar, according to data from eVestment LLC, Marietta, Ga. Vontobel's U.S. growth equity strategy returned 8.55% for the year ended Dec. 31, vs. 1.38% for its benchmark, the S&P 500. Its five-year annualized return was 15.5%, vs. 12.57% for the benchmark; its 10-year return was 8.8%, vs. 7.31%. Meanwhile, Vontobel's global growth equity strategy returned 5.5% for the year ended Dec. 31, vs. -2.36% for its benchmark, the MSCI All Country World index. Its five-year annualized return was 11.45%, vs. 6.09%, while the 10-year return was 9%, vs. 4.76%.

    Client withdrawals can be a problem with strategies that are closely tied to one person, said one consultant who has been following Vontobel and asked not to be named.

    There are some managers that are team-driven organizations, and there are others where individuals are presented as having very significant influence on the strategy. Change in those latter firms “are much more disquieting for everyone involved,” he said.

    It's also possible that a number of these clients had key-man risk clauses in their contracts with Vontobel.

    Sources in the money management industry have heard that Mr. Jain is looking to establish his own boutique management firm after he leaves Vontobel. However, despite terminating their relationship with Vontobel because of his departure, the asset owners with which P&I spoke not only did not know Mr. Jain's future plans but said they wouldn't automatically follow him.

    “We do not know where (Mr.) Jain is going. We focus more on the firm and the team so it is unlikely we would have any particular interest in following one particular” portfolio manager, said Carl Nelson, executive secretary and CIO of the San Luis Obispo County Pension Trust.

    Steven K. Snyder, executive director and CIO of the Oklahoma Police Pension & Retirement System, also said members of the retirement system did not know where Mr. Jain was going.

    Mr. Snyder added: “Since we do not know where he is going, we, obviously, are not planning on investing in his new firm.”

    Susan Boutin, executive director of the Metropolitan Water Reclamation District Retirement Fund, explained that the funds managed by Vontobel were being transitioned into an index fund, and “if the trustees decide to hire an active manager in the future, a RFP would be required for a search.”

    Mr. Jain could not be reached for comment. n

    Reporter Meaghan Kilroy contributed to this story.

    Related Articles
    Vontobel growth surges with emerging markets
    Vontobel Asset Management appoints co-CEOs
    Vontobel names head of fixed income
    Vontobel appoints emerging markets bond portfolio manager
    Vontobel to acquire majority stake in TwentyFour Asset Management
    Vontobel Asset Management set to expand institutional strategy for Asia-Pacific…
    Vontobel taps new CIO for growth equities boutique
    Ann Arbor Employees' Retirement System drops Vontobel
    Former Vontobel CIO launching long-only equity shop
    Vontobel adds executive director for Japanese institutional clients
    El Paso County makes private equity fund-of-funds commitment, terminates Vontob…
    Recommended for You
    Advisors Asset Management brings on head of institutional and alternatives
    Northern Trust appoints global head of digital assets and financial markets group
    terminated_stamp_1550-main_i.jpg
    American Beacon to terminate 3 subadvisers, close midcap value fund
    Strong Demand Drivers Underpin Private Credit
    Sponsored Content: Strong Demand Drivers Underpin Private Credit

    Reader Poll

    June 6, 2022
    SEE MORE POLLS >
    Sponsored
    White Papers
    Nearing the finish line: Ideas on end-state investing for corporate DB plans
    The Meaning of "Portfolio Intelligence"
    Credit Indices: Closing the Fixed Income Evolutionary Gap
    Forever in Style: Benchmarking with the Morningstar® Broad Style Indexes℠
    Crossroads: Politics, Inflation, & Bonds
    Is there a mid-cap gap in your DC plan?
    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
    June 20, 2022 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.

    About Us

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

    Chicago Office
    130 E. Randolph St.
    Suite 3200
    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 © 1996-2022. Crain Communications, Inc. All Rights Reserved.
    • Topics
      • Alternatives
      • Consultants
      • Coronavirus
      • Courts
      • Defined Contribution
      • ESG
      • ETFs
      • Hedge Funds
      • Industry Voices
      • Investing
      • Money Management
      • Opinion
      • Partner Content
      • Pension Funds
      • Private Equity
      • Real Estate
      • Russia-Ukraine War
      • SECURE Act 2.0
      • Special Reports
      • White Papers
    • Rankings & Awards
      • 1,000 Largest Retirement Plans
      • Top-Performing Managers
      • Largest Money Managers
      • DC Money Managers
      • DC Record Keepers
      • Largest Hedge Fund Managers
      • World's Largest Retirement Funds
      • Best Places to Work in Money Management
      • Excellence & Innovation Awards
      • WPS Innovation Awards
      • Eddy Awards
    • ETFs
      • Latest ETF News
      • Fund Screener
      • Education Center
      • Equities
      • Fixed Income
      • Commodities
      • Actively Managed
      • Alternatives
      • ESG Rated
    • ESG
      • Latest ESG News
      • The Institutional Investor’s Guide to ESG Investing
      • ESG Sustainability - Gaining Momentum
      • Climate Change: The Inescapable Opportunity
      • Impact Investing
      • 2022 ESG Investing Conference
      • ESG Rated ETFs
    • Defined Contribution
      • Latest DC News
      • DC Money Manager Rankings
      • DC Record Keeper Rankings
      • Innovations in DC
      • Trends in DC: Focus on Retirement Income
      • 2022 Defined Contribution East Conference
      • 2022 DC Investment Lineup Conference
    • Searches & Hires
      • Latest Searches & Hires News
      • Searches & Hires Database
      • RFPs
    • Performance Data
      • P&I Research Center
      • Earnings Tracker
      • Endowment Returns Tracker
      • Corporate Pension Contribution Tracker
      • Pension Fund Returns Tracker
      • Pension Risk Transfer Database
      • Future of Investments Research Series
      • Charts & Infographics
      • Polls
    • Careers
    • Events
      • View All Conferences
      • View All Webinars
      • 2022 Retirement Income Conference
      • 2022 Managing Pension Risk & Liabilities
      • 2022 WorldPensionSummit