JPMorgan Chase will revamp its $1.6 trillion asset management unit to compete against the likes of Blackrock and Pimco, a person with direct knowledge of the changes said.
JPMorgan Chase & Co., the second- biggest U.S. bank, will revamp its $1.6 trillion asset management unit to compete against investment firms such as Blackrock Inc. and Pacific Investment Management Co., a person with direct knowledge of the changes said.
George Gatch, 46, who has worked at JPMorgan since 1986, will replace Eve Guernsey as chief executive officer of Investment Management Americas, the person said, speaking anonymously because the changes haven't been made announced publicly. Gatch will assume Guernsey's duties and keep running mutual fund and retirement units, the person said. Institutional sales will be run by a global manager to be named in September, according to an e-mail from Gatch to employees dated Aug. 18.
“Now is the time to ensure that we have a structure that supports our future success as we confront challenges from passive managers, ETFs and a generational shift in the way our country saves for retirement,” Gatch said in the e-mail. So- called passive managers typically follow indexes instead of picking individual stocks.
The changes underscore efforts by asset management head Mary Callahan Erdoes, 42, to double revenue in five years, expanding after competitors such as Bank of America Corp. and Barclays Plc shed such units following the worst economic crisis since the Great Depression. Erdoes, who previously ran JPMorgan's private bank and succeeded Jes Staley in September. Staley took over the investment bank after JPMorgan CEO Jamie Dimon ousted investment bank co-CEO Bill Winters.
Spokeswoman Mary Sedarat declined to comment on the changes, which were reported earlier today by the New York Times' Dealbook.
Garibaldi Named
Gatch named John Garibaldi to run institutional advisory and sales in investment management, reporting to the new global head for institutional clients, he wrote in the e-mail. Garibaldi replaces John Hunt, who is leaving in October, the person with knowledge of the changes said.
Gatch, who most recently ran the retail and institutional sales business for investment management in North America, was one of three regional division heads under Guernsey, who is retiring after 32 years at the bank. Jamie Broderick will continue to run the retail and institutional businesses for investment management in the U.K., Europe and Latin America while David Hsu will do the same in Asia.
JPMorgan ranked 12th among U.S.-based stock and bond mutual fund managers as of June 30, according to Morningstar Inc. data. The bank had $103 billion of assets under management, excluding money market funds. Asset Management oversees $1.6 trillion in investments, which includes $1.2 trillion it directly manages.
The bank, ranked second behind Bank of America in deposits and assets among U.S. lenders, was the only large Wall Street bank to remain profitable through the financial crisis.
