Poaching on the Street

When you are running money and your name is not on the door a liftout of your investment team is a dream come true.  Telling the man to shove it while walking aross the street for a bigger paycheck is about as good as it gets on the buyside.

Guaranteed contracts, fancy new digs and even an aeron chair for your big butt. What is not to like?

A lawsuit for one. And trying to move down the street with billions in assets usually gets noticed by the self-absorbed schmucks in the corner offices.

The Street is buzzing about Deutsche Investment Management's poaching of a fixed-income team from Invesco. The timing is strange considering the Invesco managers just signed golden handcuffs in the form of "Global Partner Agreements" a few weeks back. Apparently the manager's turned skittish after Invesco was engaged in talks with Putnam over bringing on fixed-income professionals and assets from Putnam during its prolonged sale process. There seems to be a lack of trust at Invesco, which might be understandable given that their CEO has been on the job for only 18 months. The fixed-income mangers are in Louisville. Do these guys really know each other? Probably not. The legal documents were floating around yesterday... Each of the WFI Global Partners has been contacted in secret by Deutsche regarding leaving employment at INVESCO and becoming employed at Deutsche. Upon information and belief, Deutsche has been scheming with Global Partners for months in an effort to raid illegally WFI's business. The Head of Deutsche's Asset Management met with the CEO of AMVESCAP last week and it did not go well. ...the resignation of so many key members of your staff would undoubtedly result in the near total assets loss for Investco. Even if the clients don't come over Deutsche claims they are willing to start the business de novo if necessary. It sounds like the assets are primarily institutional, ie. a few large accounts. Perhaps a few will defect with the money managers to Deutsche. You can't blame the money mangers at Invesco getting jittery about their future at the shop after rumors of a deal with Putnam's fixed income team came to light. Nobody trusts each other at these shops, backstabbing and palace coups are part of the game. Moving over to Deutsche Bank might work out for a select few, but chances are this will set off domino's all over the Street. Salespeople who lived off of commissions at Invesco will be hurting. Clients will start redeeming. Lower revenues at Invesco will likely mean back office people will eventually lose their jobs. Along with marketing staff and other professionals. Just another day on Wall Street. WSJ article here ----------------------------------------------------------------------------------------------------------------------------------------- The content contained in this blog represents the opinions of 1440 Wall Street. This commentary in no way constitutes a solicitation of business or investment advice. It is intended solely for the entertainment of the reader, and the author.

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