Cigna Retirement & Investment Services (CIGNA RIS) has removed $5-10 billion in taxable fixed-income assets from its TimesSquare Capital Management subsidiary, which had been managing the money. David Marks, who joined CIGNA RIS last October as cio, says he felt it was inappropriate for insurance company assets to be managed by a total rate of return manager and that TimesSquare would be more effective at winning other institutional business if it was financially and operationally independent. In all, CIGNA RIS has $35-40 billion in taxable fixed-income assets.
Additionally, TimesSquare has outsourced its high-yield money, moving $400 million to Shenkman Capital Management, a $7 billion high-yield money manager. Marks says poor performance was the reason for the move. Cigna's High-Income Shares, in which roughly half the funds were invested, were in the bottom 9% in their category over the last 10 years and in the bottom 2% over five years, according to Morningstar.com.
As a result of the move, TimesSquare will part company withRon Bringewatt, who was brought in just over a year ago fromAmerican General Investment Management as managing director and high-yield portfolio manager (BW, 11/11/01) to try to revive the portfolio. Bringewatt did not return calls. At least two other members of TimesSquare's high-yield team have left the firm, while others have taken new positions there. CIGNA's Marks declined to discuss the personnel issues in detail, though he did say that Bringewatt's departure was a mutual decision. Of the poor high-yield performance, Marks says, "It was a multi-year problem, not something that cropped up when Ron joined."
Three high-yield collateralized bond obligations worth some $1 billion are also in the process of being transferred from TimesSquare in New York to CIGNA RIS in Hartford, Conn. Marks says portfolio management responsibility for the CBOs is still being sorted out, and it is possible that CIGNA RIS will make new hires to manage the collateral. In the meantime, they are being managed on an interim basis by a person he declined to name. Carlton Taylor, a senior analyst based in Hartford who has worked on the CBOs, will likely continue to have some role in their management, Marks says.
