IRELAND - The e11.7bn Irish National Pension Reserve Fund has Bank of Ireland Asset Management under close review, assessing whether to terminate its e400m active pan-European mandate with the troubled manager.
BIAM to date has lost no Irish clients, although it has suffered severe asset outflows in the range of e6-8bn, primarily from US and Australian pension funds over performance and personnel issues.
“Clearly the people have changed, the performance is below par because they are deep value managers, and one of our concerns would be that the process would change, by virtue of the fact that the people who were administering the old process have changed,” said Ronan O’Connor, head of risk management, portfolio construction and asset allocation, NPRF.
“We will be watching very closely to see what happens process wise and how these new people integrate themselves.”
The NPRF, like many other pension funds in Ireland, is concerned over who is to take Chris Reilly’s position, the current CIO, when he retires in 2007.
Two of the six BIAM staff who defected to Perpetual Trustees in October last year were deputy CIOs. The third deputy CIO, Jane Neill has been on maternity leave.
Since then, BIAM has promoted Leona Nicholson to deputy CIO and recruited two more senior personnel, Ivan Fox who joined from Irish Life last week and Paul Boyne who is to join on 1 February from Morgan Stanley Investment Management to head up the global equity product.
Pat Lardner, director, institutional business Ireland, BIAM commented on the successor issue: “The successor to Chris Reilly is potentially within BIAM and is also potentially within the people that we are bringing in…In terms of the point on succession, Chris has given a commitment that he will be here until 2007 and we have said to clients that we will lay out for them in advance of him going what is going to happen. We won’t wait until he is gone to do that.”
But clients are concerned at the prospect of BIAM effectively having staff compete for the position.
“We met them [BIAM] very recently and that was something I was concerned about, in that they were going to effectively have a competition for the CIO post which has to be run off over the next year and a year is a very short period in investment management,” said O’Connor.
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