AT&T Team Move To JP Morgan

The prospect of mass defections by experienced in-house teams who are lured by more attractive remuneration packages in the third-party fund management sectors, is a nagging worry for dedicated pension fund managers that have built up substantial private equity interests.

Not so for AT&T Investment Management Corporation. Although its private equity management team has moved to JP Morgan Investment Management, the managers have taken with them a management contract for AT&T’s private equity investment programme. The team, headed by Larry Unrein, had been wooed by several potential employers before JP Morgan, and this arrangement is believed to have been proposed to the private equity division by senior managers at AT&T Investment Management.

By farming out management of its private equity portfolio of nearly $4 billion (ecu 3.6 billion) to the team which built it up, AT&T has ensured continuity of management and continued access to private equity houses with which the group had established relationships. The existing close ties between AT&T Investment Management and JP Morgan may have smoothed the path for this arrangement, but the inherent logic of the arrangement may encourage other pension funds to contemplate cutting similar deals.

While AT&T avoids major upheaval to its private equity programme, JP Morgan Investment Management gains a ready-made private equity business which will enable it to offer its clients a broader range of investment services. The group, which manages over $240 billion, did not previously have a particular presence in this market sector.

The new seven-member team is headed by Larry Unrein and includes Theodore Beit, Brendan Cameron, Laureen Costa, Jarrod Fond, Eliot Powell and Sandra Zablocki.