BMO Global Asset Management officially launched a new Prime Institutional money fund, which will have a floating NAV once the SEC's money market fund reforms are implemented in October. It's not the first new Prime Inst fund that's been launched since MMF reforms were announced, and it likely won't be the last. But it is one of just a few that we've come across. Schwab introduced a new Prime Inst fund with the launch of Schwab Variable Share Price Money Fund earlier this year (see our Nov. 10, 2015 News, "Schwab Files Variable NAV Money Fund; Invesco Announces Changes), and T. Rowe Price is planning to launch a Prime Inst fund in September, as PM Joe Lynagh tells us in the June issue of our Money Fund Intelligence newsletter. Also, we report on the retirement of three veteran money market fund executives below, Rich Hoerner from BlackRock, Mike Fields from American Beacon, and Tom Territ from Federated.
A press release, entitled, "BMO Global Asset Management Launches Institutional Prime Money Market Fund" explains, "BMO Global Asset Management today introduced the BMO Institutional Prime Money Market Fund to provide institutional and retail investors with a money market fund that will eventually have a floating net asset value (NAV). Managed by BMO Global Asset Management's team of experienced money market professionals, this new fund is expected to have a stable NAV until approximately October 3, 2016. Thereafter, the fund's NAV may begin to float as a result of an expanded four decimal NAV (e.g. $1.0000) and slight changes to the market values of the underlying portfolio of very short term, income securities. The new fund also may be subject to liquidity gates and/or redemption fees as required by the new money market fund regulations."
John Blaser, President of BMO Funds, comments, "As a global investment solutions provider, BMO strives to meet the ever-changing needs of our institutional and retail clients by continuing to build our selection of funds. The new regulatory reforms will soon restrict institutional investors from stable NAV money market funds other than government money market funds. We expect a significant shift of assets out of prime money market funds and into government money market funds. As a result, the new fund is expected to provide enhanced total returns well above the expected low rates of return in government money market funds in the new regulatory environment."
He adds, "This new fund brings BMO Global Asset Management's total U.S. suite to 45 mutual funds. It will be an excellent addition to our existing family of money market funds, comprised of the BMO Prime Money Market Fund, BMO Tax-Free Money Market Fund and BMO Government Money Market Fund, which will remain ideal for institutions with a preference for a stable NAV." (See our April 13 News, "BMO Files for Floating NAV Prime MMF; GuideStone Going Government" for more.)
In other news, three giants of the money market fund industry announced their retirements in recent weeks. The latest is Rich Hoerner, BlackRock's Co-Head of Global Cash Management, who will be leaving at the end of the year. BlackRock shared with us a memo from Richie Prager, Global Head of the Trading, Liquidity and Investments Platform. He writes, "Few individuals have lengths of service that extend beyond the life of the firm. After 29 years with BlackRock in many roles across the Cash Management business, Rich Hoerner has informed me of his intention to retire from BlackRock at the end of 2016."
Prager explains, "Rich joined the cash business in 1992 when it was part of PNC Bank after having spent five years in PNC's Trust division. In 1996, BlackRock assumed the investment management responsibilities for PNC's fixed income platform, and his length of service reflects his time spent at PNC. Throughout his tenure, he rose through the ranks of the cash management investment platform, managing multiple money market portfolios and leading teams of investment professionals. Prior to becoming Chairman of the Global Cash Management business, Rich was most recently the co-Head of Global Cash Management alongside Tom Callahan."
He continues, "Rich's leadership and investment acumen have had a direct impact on the success and evolution of our Cash Management platform. Under his careful watch, the business successfully navigated some of the most tumultuous market conditions in the short term markets and persevered in delivering to our clients the safety and security they expect from their cash investments. Rich's conservative, yet savvy approach to money market management has shaped the investment philosophy of the team and his influence is measurable across all corners of the cash business. Rich will continue to advise the team through the implementation of US money market fund reform to ensure a smooth transition for our clients. His contributions to BlackRock will continue long into retirement, particularly in those individuals he has mentored and guided over his career. Please join me in thanking Rich for his lasting impact on BlackRock and wish him all the best in retirement."
We also learned that Mike Fields, Chief Fixed Income Officer at American Beacon Advisors and former Portfolio Manager of American Beacon's Money Funds, retired on May 31. An internal memo comments, "As a founding member of the firm, Mike, along with former Chairman and CEO Bill Quinn, were responsible for the original business plan of American Beacon Advisors back in 1986. Throughout his tenure, Mike has seen our Fixed Income team and clients through the ups and downs of volatile markets while assisting with the unprecedented growth of the firm. Mike will continue to provide support as needed on a consultant basis." Sam Silver, Vice President, Fixed Income Investments, will be assuming Field's responsibilities, according to the firm <b:>`_.
Finally, a press release, "Federated Investors, Inc. Appoints New Head of Sales," It says, "Federated Investors ... today announced the appointment of Paul A. Uhlman as president of Federated Securities Corp., Federated's distribution arm for domestic markets, effective June 15, 2016.... Uhlman will replace Thomas E. Territ who will remain with Federated and participate in the transition of duties over the next three months before retiring later in the third quarter. Territ joined Federated in 1983 and held several positions with increasing levels of responsibility during his outstanding career."
Federated President and CEO Chris Donahue comments, "Tom was an important part of Federated's growth over many years and during his tenure as president of the sales organization, led Federated's domestic sales effort to record highs in sales and assets. I'd like to thank him for his dedication and many contributions over the past 33 years."
The release continues, "In his new role, Uhlman will report to Donahue and provide overall leadership to Federated's four domestic sales units: broker/dealer; wealth management and trust; institutional and retirement; and separately managed accounts (SMAs). A 26-year veteran of the company, Uhlman has most recently served as national sales director for Federated's Institutional and Retirement Sales Division with assets totaling more than $60 billion. In this role, he led the group responsible for sales to pension accounts and other retirement programs, endowments, foundations, states and other government entities. He joined the company in 1990, serving as an account administrator and sales representative and later as a vice president in trust sales. In 1999, his role expanded to sales director, global accounts. He was named senior vice president in 2004, national sales director for institutional sales in 2007 and executive vice president in 2010."
Donahue adds, "Paul has successfully led the institutional sales division at Federated to new heights, expanding our relationships in the demanding world of top-level institutional investors. In his new role, Paul will apply his leadership skills and management abilities to a broader, more diverse group of customers."
Crane Data would like to thank Hoerner, Fields and Territ for their many and excellent years of service to the money market mutual fund industry. We wish them all the best of luck in retirement!
