Several fixed-income clients of Boatmen's Trust Co. have terminated the firm, and others are reviewing it, following the sudden departure of a group of fixed-income managers and support staff.
The group, headed by Frank J. Aten, formerly Boatmen's fixed-income assistant chief investment officer, set up Rockwood Capital Advisors, a domestic fixed-income money management firm.
Boatmen's executives D. Andrew Holgrieve, Paul D. Rapponotti, Dan Lane, Scott Leiberton, Andy Brown and David Brooks also left to join Rockwood.
Sources said the managers were dismissed March 19 by NationsBank Corp., which wanted them to sign employment contracts after their intention to start Rockwood became known. They said the managers had been concerned about NationsBank's acquisition of Boatmen's and their place in the merged company.
Additionally, NationsBank's recent announcement that it was selling its institutional corporate trust businesses was greeted with skepticism among Boatmen's local clients.
Earlier this year, NationsBank announced a reorganization of its asset management operations in which Boatmen's equity assets would be transferred to NationsBank's subsidiary TradeStreet Investment Associates Inc., and the bond assets placed into a new fixed-income unit. The new unit, Boatmen's Capital, will be headed by Landers Carnal, CIO for fixed income at Boatmen's Trust.
Sandy Galt, Boatmen's Trust president, said bank officials won't comment on the reasons the staffers left. But, he added: "I'm confident that all the necessary steps are being taken to ensure the continuity of the organization."
Day-to-day responsibilities are being assumed by the four other portfolio managers, said Mr. Carnal. Two other people were promoted internally.
Some clients had complained privately about not being informed by Boatmen's about the team's departure. Mr. Carnal said Boatmen's sent clients, by fax, a letter with the details of the departures as soon as the group left.
"We're always concerned if our clients don't feel we're moving fast enough," said Mr. Galt. "The point is: once we knew the facts, the next day the clients were contacted."
The $560 million St. Louis Police Retirement System terminated Boatmen's after the departures, a spokesman said. Boatmen's had managed $268 million in fixed income and balanced portfolios. It will continue as custodian pending NationsBank's sale of trust and custody operations.
The $3.6 billion Missouri State Employees' Retirement System, Jefferson City, brought in-house a $230 million corporate bond index portfolio managed by Boatmen's following the team's departure.
The $700 million Oklahoma State Insurance Fund, Oklahoma City, left its $100 million bond portfolio with the firm for now, said Bill Stracker, director. The fund has instructed Boatmen's not to trade on the account without consulting fund officials.
