The Boston Co. Money Managers Quit
BOSTON (AP) _ Seven leading money managers quit The Boston Co., an asset managing subsidiary of Mellon Bank Corp., when the bank turned down their buyout offer, officials said.
The defections won’t hurt the subsidiary’s position in the Boston market, Mellon bankers said.
``Naturally we are aware that our customers have heard about it but our long-term success speaks for itself, ″ said Jonathan Hubbard, a spokesman for The Boston Co. ``We have a qualified team of experts fully capable of managing the business.″
The seven managers all worked for The Boston Co. Asset Management Inc., a unit of The Boston Co. handling about $26 billion in institutional assets. The unit has 150 employees.
The managers had proposed buying out the unit for $150 million from Mellon Bank, which bought The Boston Co. for $1.45 billion in May 1993.
Troubles between The Boston Co.’s unit and the bank came to a head when Mellon tried to fire two managers for securities-lending losses.
The managers had also complained that the Mellon Bank was reducing their autonomy. Mellon has moved three of the Boston Co.’s four branches to Pittsburgh, its headquarters.
Hubbard rejected the charge that the institutional management branch lacked autonomy, saying that Mellon Bank owns 12 autonomous asset management companies, all of which function well.
Mellon Bank is the second-largest asset management firm in the country, with over $200 billion in assets managed.
Desmond Heathwood, the institutional asset management unit’s chairman and chief executive officer, is planning to start up a competing asset management firm by next week.
Heathwood has been temporarily replaced by Philip Roberts, Mellon’s chief investment officer.
Along with Heathwood, those leaving were: Michael A. Jones, the business’s chief operating officer; Mark E. Donovan, a senior manager of stock investments; William R. Leach, a senior manager of bond investments; William W. Carter, the unit’s president; Harry Rosenbluth, manager of the unit’s Dynamic Equity Fund; and William Kelley, the unit’s chief financial officer.