Deals & People December 17, 2008

Citi-Smith Barney Spawns New Advisory Shop

Stanford Financial Group announced the formation of Stanford Institutional Consulting, a new business group within its global network of financial services companies.
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Based in Baltimore, Stanford Institutional Consulting (SIC) serves the needs of both high-net-worth clients and institutional clients spanning education, healthcare, foundations, endowments, associations, and retirement plans, with assets ranging in size from $10 million to over $1 billion, according to a press release.

SIC will be led by Financial Adviser Christopher C. Aitken, who will serve as executive managing director and senior investment consultant, and Stephen L. Thacker, managing director, senior investment consultant. Aitken and Thacker have worked as a team for the past 15 years, according to the release.

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“The formation of Stanford Institutional Consulting underscores our commitment to using our strong balance sheet to build a top-notch portfolio of institutional and wealth management services,” said Sir Allen Stanford, chairman, Stanford Financial Group of Companies, in the release. “At a time when the financial services industry is facing unprecedented challenges, the Stanford Group is poised to continue its proven track record of growth.”

According to the company, Aitken brings more than 22 years financial services experience to Stanford and has been ranked among Barrons‘ “Top 100 Financial Advisors” for the past three years and Registered Rep‘s “Top 100 Financial Advisors” for the past two years. Prior to joining Stanford Institutional Consulting, Aitken was managing director for Citi-Smith Barney Institutional Consulting.

Thacker also joins the company from Citi-Smith Barney Institutional Consulting,where he has served for the past 16 years, most recently as a senior institutional consultant. In his new role, Thacker will provide counsel on investment policy statements, asset allocation, investment adviser research, and performance reporting for foundations, endowments, hospitals, pensions ,and high-net-worth families.

The following individuals have also joined at Stanford Institutional Consulting, according to the release:

  • Dawn Pfaff, vice president and senior analyst, is responsible for managing the team of analysts at Stanford Institutional Consulting. She brings more than 20 years industry experience to Stanford and joins the company from Citi-Smith Barney Institutional Consulting, where she was manager, research analyst.
  • Timothy J. Truss, senior analyst, also joins from Citi-Smith Barney Institutional Consulting where he was a research analyst. With more than 10 years financial services experience, Mr. Truss is responsible for conducting manager research, developing research reports, and analyzing portfolios.
  • Danyelle Berger, senior analyst, brings nearly 10 years experience to Stanford Institutional Consulting and is responsible for manager and statistical analysis, performance reviews and client reporting. Prior to joining the company, she was a research analyst with Citi-Smith Barney Institutional Consulting.
  • Ayaz Hasan, analyst, spent the last two years at Citi-Smith Barney Institutional Consulting where he served in the same capacity. In his new role, Ayaz will focus on client reporting, performance analysis and manager research.
  • Shari Serafin, vice president, Operations Manager has nearly 20 years financial services experience and most recently served as senior portfolio administrator for Citi-Smith Barney Institutional Consulting. She also has worked with Prudential Securities in New York where she managed the municipal bond liaison desk. She began her career with First National Bank of Maryland where she was a junior fixed-income trader.
  • Teri Houp, vice president, Portfolio ADMINISTRATION, joins Stanford Institutional Consulting as administrator from Citi-Smith Barney Institutional Consulting, where she has served for more than 22 years in portfolio administration. Prior to Citi, Houp held various positions with Legg Mason Wood Walker, Inc.
  • Karen Doggett, senior portfolio administrator, brings more than 25 years industry experience to Stanford. Most recently, Doggett worked in portfolio administration with Citi-Smith Barney Institutional Consulting, prior to which she worked with George K. Baum & Co. where she held the positions of first vice president, Municipal Syndicate and vice president of Operations.

More information is available at www.stanfordinstitutionalconsulting.com

The Markets December 16, 2008

Asset Managers Bullish about U.S. Equity Markets

The latest Investment Manager Outlook from Russell Investments finds that half of the managers surveyed believe the U.S. equity markets are going to rise 10% or more in 2009.
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Another 27% of the 206 managers who responded to the survey anticipate the equity markets to rise somewhere up to 10%, Russell said. Almost three-quarters (72%) of managers surveyed believe the market is currently undervalued, considerably more than the 45% from last quarter and more than double the 34% who said so a year ago.

“Managers believe that the market has overshot the damage done by the ongoing recession and is now oversold and undervalued,” said Erik Ristuben, Russell’s chief investment officer, North America, in a press release. “In their opinion, this market has been driven by panic and fear as much as by economic fundamentals.”

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The quarterly Investment Manager Outlook revealed record levels of bullishness in four separate asset classes: corporate bonds (60%), U.S. small cap value (54%), U.S. mid cap value (53%), and high-yield bonds (53%).

In addition, managers retained their preference for growth investing versus value, but the gap in attractiveness between growth and value has shrunk considerably, according to the announcement. U.S. large cap growth remains the managers’ favorite asset class at 67%, but manager bullishness for U.S. large cap value jumped 21% points from 40% to 61%. Traditionally, in the Russell Investment Manager Outlook, the gap between these two asset classes is 20 percentage points at a minimum.

Managers were not quite as enthusiastic for non-U.S. equities, Russell found. While bullish sentiment rose nine percentage points from last quarter for emerging markets (37%) and 12 percentage points for developed market equities (36%), they still are well down from the 49% and 61%, respectively, of December 2007.

Bond Appeal

The greater appeal of bonds in Russell’s quarterly Investment Manager Outlook represented a major development.

Manager bullishness for corporate bonds reached an historic high of 60%, up from 37% last quarter and from a survey low of 8% in the first quarter of 2006. The level of bullishness for high-yield bonds also soared to a new high, reaching 53% from 39% last quarter and 28% one year ago.

In addition, according to the Russell press release, despite all that has happened to the financial system, bullishness in the financial services sector grew to 45% from 40% last quarter—well above the 33% mark of one year ago.

More results are available at www.russell.com/IMO.

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