Deals and People March 2, 2018

Retirement Industry People Moves

Seyfarth Shaw hires ERISA attorney; Qualified Plan Advisors opens Florida office; Principal Promotes Patterson to Lead Full-Service Retirement and Investor Business; and more.

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Seyfarth Shaw LLP has announced that S. Bradley Perkins has joined the firm’s Labor & Employment department and ERISA [Employee Retirement Income Security Act] and Employee Benefits Litigation group as a partner in San Francisco. Perkins arrives from the Pacific Maritime Association (PMA) where he served as senior counsel.

Perkins focuses his practice in the areas of employee benefits fiduciary advice, litigation under the Employee Retirement Security Act of 1974 (ERISA), and litigation involving fraudulent and abusive health care providers. He has represented clients in a wide range of ERISA matters in court and in arbitration, including complex class actions and single-plaintiff lawsuits. He has handled matters involving individual pension and welfare benefit claims, severance pay claims, executive compensation disputes, benefit discrimination, and claims regarding plan design and fiduciary responsibility. In the class action realm, he has defended various types of claims, including claims for benefits and claims for breach of fiduciary duty, including 401(k) fee and proprietary fund litigations. In addition, Perkins has experience representing health care plans and payers in health care reimbursement and provider billing litigation involving claims under ERISA, RICO [Racketeer Influenced and Corrupt Organizations Act] , and state law, including the California Insurance Frauds Prevention Act.

“Our team has worked closely with Brad for many years during his time at the PMA and are thrilled to officially welcome him to the firm,” says Laura Maechtlen, chair of Seyfarth’s Labor & Employment department. “He has a tremendous reputation of handling high-stakes employee benefits litigation and brings with him a keen understanding of the growing health care fraud issues facing employers today.”

A regular writer and speaker, Perkins is a member of the International Foundation of Employee Benefits Plans and the American Benefits Council. He currently serves as a contributing editor to “Employee Benefits Law” and its annual supplements, and he serves as a management co-chair of the Subcommittee on Liability Issues Unique to Welfare Plans of the Employee Benefits Committee of the ABA Section of Labor and Employment Law. Perkins received his J.D. from The George Washington University Law School where he was senior articles editor of “The George Washington Law Review.” He earned a B.A., cum laude, from Duke University.

Qualified Plan Advisors Opens Doors in Florida

Qualified Plan Advisors, a division of Prime Capital Investment Advisors, has announced plans to open its first Florida operations later this spring. Qualified Plan Advisors currently serves a number of clients in Florida. 

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Tyler Olson will assume the title of managing director–Florida Operations and will be leading Qualified Plan Advisors’ Retirement Advisory business in Florida.  “Tyler has a 14-year track record of building a world-class retirement business based out of Overland Park, Kansas. We couldn’t be more thrilled that he has agreed to relocate to Florida and continue our buildout of retirement practices across the United States,” says Glenn Spencer, Qualified Plan Advisors CEO.  Qualified Plan Advisors will have 15 offices spanning coast-to-coast from Northern California to Florida. 

Qualified Plan Advisors will establish temporary offices in St. Petersburg and plans to be in permanent space by the end of the summer. 

Principal Promotes Patterson to Lead Full-Service Retirement and Investor Business

Principal Financial Group has announced that Jerry Patterson will become the next senior vice president leading the full-service retirement and individual investor businesses for Retirement and Income Solutions (RIS) effective early second quarter. After 32 years with the company, senior vice president, Greg Burrows, announced his intentions to retire at the end of July 2018.

Burrows joined Principal in 1986. Over his career, he’s worked in several U.S. locations, Argentina and Japan, running businesses and helping provide retirement solutions to people around the world. He has also been a leader in the retirement industry, educating governments and regulators in many markets on retirement-related issues and trends.

Patterson is currently the senior vice president of RIS and has responsibility over individual investor, retail annuity, bank and full service payout. In his new position, he’ll continue to report to Nora Everett, president of RIS.

He brings more than 17 years of experience at Principal. Prior to joining Principal, he worked for a number of financial and insurance companies in management and marketing roles. Patterson joined Principal in 2001 as chief marketing officer for our Life and Health businesses. He spent time in New York as the chief operating officer of Nippon, Life Benefits, prior to moving into his current role in 2012. An internal and external search is underway to find his successor for the retail annuity, bank and full service payout businesses.

Lighthouse Secures Mesirow Financial Assets

Lighthouse Investment Partners, LLC (Lighthouse) and Mesirow Financial (Mesirow) announced the signing of a definitive agreement under which Lighthouse is expected to acquire substantially all of the assets of Mesirow Advanced Strategies (MAS), the multi-manager hedge fund division of Mesirow.

A significant portion of the MAS team is expected to join Lighthouse as part of the transition and will continue to provide investment oversight, operational support and client service to the MAS business. This results in a broader and complementary set of resources and talent across the organization and provides greater flexibility in constructing and executing portfolios.

“The combination of Lighthouse’s industry-leading managed account platform and strong track record, coupled with MAS’s strengths in less liquid strategies, such as credit and other lending strategies, creates what we believe is a unique offering of which our clients will benefit,” says Richard Price, chairman and chief executive officer of Mesirow Financial. “We believe this is enhanced by the strong cultural fit of our shared values, including putting client interests first, while acting with intellectual honesty, enthusiasm, accountability, collegiality and humility.”

The transaction is subject to a number of customary closing conditions. Closing is targeted for mid-year. Following the expected completion of the transaction, Mesirow Financial is expected to serve as a distribution partner to Lighthouse.

RMB Announces Office Opening in Minneapolis

RMB Capital (RMB) has announced the opening of a new office in the Minneapolis-St. Paul area to support its growing client base in Minnesota.

Wealth adviser Chris J. Bach, CFA, CFP, was recently promoted to vice president and will head up operations at the new RMB office, located in Bloomington, Minnesota. Bach joined RMB in 2014 while living in Chicago. After years of frequent travel to meet with clients, Bach welcomed the opportunity to move back to the area and help expand RMB’s footprint.

“We’ve had advisers coming back and forth to this area regularly for about a decade and decided it was time to put down roots,” says Dimitri Eliopoulos, RMB partner and managing director. “In a market like Minneapolis-St. Paul, we believe we stand out as an independent firm that blends expertise in financial planning with sophisticated, customized investment solutions. Combining this with Chris’s passion, dedication, and connection to the community should continue to open many doors for us here.”

Outgrowths of RMB’s wealth management business include retirement plan consulting, corporate executive services, and a growing family office services practice, which is partially due to its recent combination with Milwaukee-based Jacobus Wealth Management (JWM). Bach’s father, Peter Bach, CPA, former chairman and CEO of JWM and now managing director at RMB, will assist the new location in a business development role as he splits his time between Milwaukee and Minneapolis.

Prior to joining RMB, Chris Bach served as a senior analyst for HSBC North America Holdings. He holds a bachelor’s degree in finance from Indiana University and is a CFA charterholder and a Certified Financial Planner professional.

OM Asset Management Rebrands as BrightSphere Investment Group

OM Asset Management plc, a global, diversified multi-boutique asset management company, has announced that it will be changing its brand name to BrightSphere Investment Group plc, effective March 26. In addition, Steve Belgrad, who was named as the company’s next president and chief executive officer, has officially assumed those roles on March 2. 

“BrightSphere and our new logo dynamically blend energy and innovation with our commitment to a global, aligned multi-boutique model,” says Belgrad. “Our logo represents the unique and complementary attributes of our Affiliates which combine to create a diversified richer whole. Following the completion of our separation from Old Mutual plc in November, and our management transition, this new brand reflects our evolution to an independent asset management company, focused on our affiliates and their clients, and global opportunities for investment and growth.

“Working together with our high quality affiliates as BrightSphere Investment Group, we will continue to evolve and enhance the ways we support affiliate growth initiatives and invest for the future, while diversifying our business through additional investments in boutique asset management firms,” Belgrad continues. “Our business is well positioned to execute on a range of opportunities in the global investment marketplace, and I am honored to lead our team at the Center as we work to create long-term value for our shareholders.”

On March 26, as part of the rebranding process, the company’s New York Stock Exchange ticker will change to BSIG from OMAM. In addition, its CUSIP will become G1644T109. OMAM’s debt issues will also assume new tickers: the 5.125% Notes Due 2031 will change to BSA from OMAA and the 4.800% Notes due 2026 will change to BSIG 26 from OMAM 26.

Also on March 26, the BrightSphere Investment Group corporate website will become www.bsig.com and the company’s email will shift to @bsig.com.

Investing March 2, 2018

Connecticut State Treasurer Makes Compelling Case for ESG

An open letter penned by Connecticut State Treasurer Denise Nappier presents an articulate defense and endorsement of ESG investing programs—in this case suggesting divestment from gun manufacturers may be in the best long-term financial interest of the state’s pensioners and other stakeholders.

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Moving in response to the latest in a long series of mass shooting incidents impacting communities across the United States, Connecticut State Treasurer Denise Nappier this week announced that her state will significantly step up its shareholder activism with respect to its ownership of stock in firearm manufacturers. She specifically cites the potential of future divestment, should the shareholder activism fall short. 

In a letter written to State Senator Gayle Slossberg, later made public, Nappier states in no uncertain terms that, regarding the process of potential divestment, as principal fiduciary of the Connecticut Retirement Plans and Trust Funds (CRPTF), she carries “sufficient authority to divest following a period of engagement with our portfolio companies, consistent with the State’s divestment laws.”

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In the meantime, Nappier says she is implementing a process of “fortifying our efforts in the corporate boardrooms of our portfolio companies that manufacture guns, and pursuing aggressively their adoption of the Sandy Hook Principles—a set of measures aimed at curbing gun violence, keeping guns out of the hands of children and those with mental health problems, and supporting universal, federal background checks.”

As Nappier lays out, the assets of the CRPTF are invested in five companies that manufacture guns, as follows: CIE Financiere Richemont SA, $7.19 million; Daicel Corporation, $1.65 million; Olin Corporation, $879,071 and fixed income valued at $915,255; Orbital ATK Inc., $1.02 million and fixed income valued at $784,437; and Vista Outdoor, Inc., $4.04 million. All told, the CRPTF’s exposure to gun manufacturers is $16.5 million, or .05% of the assets of the CRPTF.

While the investing rules controlling the Connecticut public pension fund are different from those governing corporate retirement plans run under the Employee Retirement Income Security Act (ERISA), Nappier’s argumentation as to why divestment may be the right thing to do offers some food for thought for anyone charged with the fiduciary management of retirement plan assets.

As readers may know, some voices in the retirement plan space have emerged in the last several months arguing that the use of environmental, social and governance (ESG) investing programs and principles has growth too political. For example, the American Council for Capital Formation has challenged both CalPERS and the New York City pension system for making moves to reduce exposure to fossil fuel producers. However, an even greater number of business leaders and public officials today argue the move to more closely consider ESG factors when building investing programs is coming at the behest of individual and institutional investors and is simply the right thing to do, financially and otherwise. 

Indeed, this is the argument Nappier relies on to explain the new efforts: “I am charged with making investment decisions in the best interests of the beneficiaries that depend on these assets for retirement. Fiduciary duty requires that I take into account not only the appropriate balance between risk and return, but also the long-term viability of the investment itself. I believe that companies whose shares we hold have an obligation to address public issues that have potential effects on the business operations of the company.”

Nappeir goes on to state that she “believes that common-sense gun control measures and whether investment in gun companies will deliver returns that meet the long-term interests of the plans’ beneficiaries are really two sides of the same coin, neither of which can be ignored.”

“The issue of gun violence is not only a public health issue, but a financial issue as well, which is central to our concern with all divestment considerations,” she argues. “Companies with sound governance—such as accountable board structures, proper management of legal and regulatory risks, and alignment of executive compensation with company performance, to name a few—lead to better, more consistent performance for shareholders over time. When companies in which we are invested fail to manage potential business risks, legal and/or regulatory actions, or reputational harm arising from the misuse of firearms, it also puts at risk our long-term shareholder value.”

Nappier concludes that divestment, as a general matter, is just one of a range of tools that investors can use to reflect their priorities. In fact, she feels it “represents the last of a series of options that shareholders can employ to effect change. Indeed, responsible ownership requires shareholders to engage the companies in which they invest to ensure that the boards are effective stewards of a viable, sustainable business strategy. If those efforts prove unsuccessful, then I agree that divestment is an appropriate course of action.”

The letter also offers significant detail on the way the state is planning to become a more active shareholder in terms of the gun manufacturers in its portfolio.

“As an investor, we recognize the multi-faceted nature of the firearms and weapons industry, which on the one hand provides weapons that enhance the safety and protection of our communities by our military and law enforcement, and provides sporting weapons used by law abiding citizens, but which, at the other end of the spectrum, places dangerous firearms into the hands of those that misuse them,” Nappier writes. “After the Sandy Hook massacre in 2012, my office surveyed the CRPTF’s investments in companies that either manufacture or distribute guns. We asked those companies to take reasonable steps to avoid the misuse of firearms in order to protect their reputation, the company’s bottom line, and our investment.”

Nappier says the state had constructive discussions with numerous companies, including Sears and Amazon, sellers of firearms accessories, which resulted in those companies taking steps to alter their business operations to help reduce gun violence and promote safety. In addition, Amazon, Dicks’ Sporting Goods and Wal-Mart indicated that their business practices were compatible with the Sandy Hook Principles.

“Two gun manufacturers, Alliant Techsystems and Olin Corporation, never responded,” Nappier explains. “We then filed a resolution with Alliant calling for adoption of the Sandy Hook Principles. (We were unable to do so with Olin because our manager sold the shares before we could file.) The Alliant resolution garnered less than 9% of shareholder votes. Despite that failure, we maintained our ownership, and in 2017 we filed a resolution with its spin-off, Vista Outdoor, seeking declassification of the board. This governance measure, in our view, will lead to greater accountability on the part of individual board members because each would be up for election on an annual basis. Our declassification resolution garnered 92% of the votes cast.”

The full letter can be downloaded here.

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