NEW YORK - W. Allen Reed started his tenure as president and chief executive officer of General Motors Investment Management Corp. by restructuring it.
Five months after taking charge of the automaker's investment subsidiary, Mr. Reed reorganized the firm into units centered around asset classes. Effective Dec. 1, the staff overseeing $63 billion in assets from GM's pension plans, the GM Foundation and GM's insurance subsidiary, Motors Insurance Corp. is divided into six investment units.
Each unit is headed by a former director. They were promoted to managing directors. The groups are:
Investment strategy and asset allocation, which has the overall responsibility for those functions for all GMIMCo-managed funds. The unit will be headed by R. Charles Tschampion, formerly vice president of portfolio strategy and manager relations.
Domestic equities, which will be responsible for U.S. public and private equity assets, both internally and externally managed. Donald R. Kurtz, formerly vice president of asset management, will be acting as managing director.
Domestic fixed income, which will be headed on an interim basis by Mr. Reed, and will handle internal and externally managed U.S. fixed-income assets.
International investments, which will be responsible for all non-U.S. equity and fixed-income assets. It will be headed by Hugh Lynch, former director of international manager relationships.
Real estate and alternative investments, which will oversee all real estate, oil and gas and non-financial assets. It will report to Thomas E. Dobrowski, former director of real estate and natural resources.
Motors Insurance Corp. investments, which will invest the insurance company's portfolio. H. Bruce Marquand, former director of MIC Investments, will be acting chief investment officer-MIC.
In addition, a new research and information systems unit is being created to support investment management operations. The unit will be headed by Vice President Patricia M. McDonald, formerly vice president and secretary of GMIMCo with responsibility over the research and special projects unit.
Previous units were abolished. They were: portfolio strategy and manager relations; internal asset management; management of private markets; research and special projects; administration; and legal and human resources.
No manager changes are expected in the near term, and no staffers have been cut. In fact, some new positions may be created as a result, according to Toni Simonetti, a company spokeswoman.
Some of the acting managing director slots will be filled permanently later, either through internal promotions or external hires, she said.
The reorganization was the result of the work of 10 teams set up after Mr. Reed arrived last summer.
Each group studied a different aspect of asset management, "to identify the processes and identify what was being done well and what was not being done well," said Ms. Simonetti.
The new organization seeks to flatten the management structure and create an organization that is less hierarchical and closer to a network of connected functions consistent with the fund's decision-making process, she said. It is the first complete review of investment management in a long time, she added.
"GMIMCo has been structured this way for a pretty long time. As they've grown, they've patched the organization together and so, over time, it's evolved into what it was," said Ms. Simonetti.
Managers who handle assets for GMIMCo said it is too early to know what effect the new structure will have on their relationships with the company.
John Seiter, executive vice president of Capital Guardian Trust Co., Los Angeles, said he wasn't sure how the new structure would act differently from the old.
Tania Zouikin, chief executive officer of Batterymarch Financial Services, Boston, said she didn't expect any changes in her firm's relationship. "We have a very specific mandate. I don't think our position will be affected," she said.
Mr. Reed, the former vice chairman and treasurer of GM Hughes Electronics Corp., Los Angeles, became president of GMIMCo when W. Gordon Binns Jr. retired June 30. Mr. Reed had been a pension executive from 1984 until 1991, when he was president of Hughes Investment Management Co., the money management subsidiary responsible for the Hughes retirement and employee savings plans.
It is not unusual for a pension executive to make changes in fund management after taking over, said Charles Marsh, president of SEI Capital Resources, Wayne, Pa. But given the size of the assets and the depth of the investment process, a smooth transition is likely, he added.
Another of the country's largest corporate pension funds, NYNEX Corp., New York, also changed its pension fund management recently, spinning it off into an in-house money management firm, NYNEX Asset Management. The wholly owned subsidiary oversees the investment management of the company's $14 billion pension fund, of which about 20% is managed internally.
Audrey S. Kent, vice president and managing director of internal asset management at the new subsidiary, said the unit was established to give the pension fund better access to financial markets and "more control over our own destiny."