GM consolidating investment teams

General Motors Asset Management Corp. is consolidating the investment management of its equities and fixed-income programs into two global units.

The automaker’s approximately $130 billion investment arm is creating a global equities group that will comprise what had been two separate asset classes – the $25 billion North American equity group and the $18 billion in international equity investments. David Holstein, previously managing director of international investments, will lead the group.

The firm is creating a similar group to run both the $20 billion domestic fixed-income program and the $2 billion international fixed-income operation, which will be headed by Tom Kao, previously managing director of North American fixed income.

Frank DelVecchio, who was in charge of the international fixed-income program, will be managing the international equity piece and reporting to Mr. Holstein, according to a company spokeswoman. She says other people are being moved around, but the moves have not yet been completed.

Decision-making issue

“We believe our new global perspective will allow us to take advantage of synergies across all of our respective equity and fixed-income programs,” says W. Allen Reed, president and chief executive officer of GM’s asset management unit.

Mr. Reed says the restructuring was not prompted by any economic reasons and is unlikely to result in lower investment management fees. “We did this because we think it will improve the investment decision-making process,” he says.

Mr. Reed also says he did not anticipate that the restructuring would affect the way GM Asset Management markets itself. The firm recently has begun positioning itself to manage outside money, not just GM pension fund assets.

Eventually, the restructuring could result in changes in asset allocation or in the lineup of investment managers, but Mr. Reed says it was too soon to predict what would happen. “Obviously when you make a change like that, you have new people taking a look at how we are structured,” he says.

Meanwhile, Peggy Eisen, managing director of the North American equity group, has left. She is joining DeGuardiola Advisors, a New York investment banking boutique that specializes in mergers and acquisitions of investment management firms. She will be a managing director there.