Bank of Ireland Asset Management, the biggest Irish fund manager, scrapped the role of chief investment officer and replaced it with three new positions overseeing stocks, bonds and research in a bid to boost performance and stem contract losses.
Paul Boyne, 38, will oversee stocks and Sean Crowe, 39, will be responsible for fixed income investments, said BIAM, as the Dublin-based money manager is known. Chris Johns, 48, was hired from Collins Stewart Tullett Plc to head global research. They'll take over from Chris Reilly, who was due to step down after 20 years as chief investment officer, the company said today.
Chief Executive Officer Mick Sweeney is revamping the business he took over in April to reverse client losses that cut BIAM's assets under management by a fifth in the past two years to about 42 billion euros ($52.5 billion). Clients have been moving away from so-called balanced funds with a mix of stocks and bonds to specialist managers, BIAM said.
``The days of the all-seeing chief investment officer, who was an expert in everything, are certainly in decline,'' said Sweeney, 45, in an interview in Dublin. ``This structure forces us down specialist lines.''
Boyne managed stocks for Morgan Stanley in London before joining BIAM last year. Crowe worked under Sweeney as head of trading at the bank's Global Markets treasury unit. Johns returns to the company he worked for until 1995 as chief economist.
The changes take effect Sept. 1. Reilly, whose contract ends in March, will remain until the arrangements are complete.
``Ending uncertainty must be a positive for any organization,'' said Graham O'Neill, director of Independent Research Consultancy Ltd., a Dublin-based fund advisory.
The fund manager's troubles stemmed from poor performance on money invested in Europe and parts of Asia for North American clients and from the departure of senior executives to take jobs at an Australian rival. Sydney-based Perpetual Trustees Australia Ltd. in 2004 lured two of Reilly's three deputies to start a global equities team in Dublin along with two other managers.
BIAM's managed group pension fund declined 0.9 percent in the first half, ranking it last out of the 18 Irish funds tracked by Mercer. The average return was a gain of 0.9 percent. BIAM is also last of the 14 funds measured over three years, though over five years it's joint second best, according to Mercer's data.
The 40 year-old money manager prefers ``value stocks,'' companies it views as cheap relative to earnings, sales or asset values, according to Mercer Investment Consulting in Dublin. BIAM benefited by shunning ``dot-com'' stocks at the end of the 1990s and avoiding Irish drugmaker Elan Corp. in 2002, when the shares slumped 96 percent, Mercer said.
BIAM's investments have since lagged because the companies it favors haven't fared as well as growth stocks that are more closely linked to the economic cycle, said Sweeney. That style remains ``non-negotiable,'' he said.
Sweeney, a 27-year veteran at the bank, said he began a ``root-and-branch'' review of the business when he moved from the bank's treasury unit, which he led for the previous three years.
The changes unveiled today will strengthen BIAM's research by placing it under Johns and making analysts cover stocks by industry instead of geographic region, he said. They will also make it easier to meet increasing demand for products tailored to an individual client's needs, Sweeney said.
Bank of Ireland's shares added 45 cents, or 3.4 percent, to 13.60 euros in Dublin. They're up 2.3 percent this year.
The money manager needs to show a consistent pickup in investment performance within 12 months, he said. Getting back to the top quartile of the international performance rankings and growing assets under management ``significantly'' will take between three and five years, said Sweeney, who has completed four marathons, including races in London and New York.
``BIAM is my new marathon,'' he said.
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