The latest overhaul of the wealth management group at BankAmerica Corp. highlights the growing importance the country's largest banks are placing on investment banking talent.
In a round of changes announced Monday, San Francisco-based BankAmerica picked G. Randy Hecht from Robertson Stephens & Co. to lead asset management activities, from mutual funds to institutional investments. Chicago private banking manager William Goodyear was tapped to head global private banking.
Mr. Hecht is now chief operating officer and president of asset management at Robertson Stephens, the San Francisco-based investment bank that BankAmerica agreed to buy June 9. The acquisition is expected to close in the fourth quarter.
Analysts said the infusion of new blood from Robertson Stephens could help BankAmerica invigorate a wealth management business that has disappointed management and shareholders in recent years.
"The current structure wasn't producing results they were looking for," said Joseph K. Morford, an analyst in the San Francisco office of Alex. Brown & Co.
BankAmerica officials noted that the wealth management group's contribution to net income grew from $54 million in 1995 to $84 million in 1996. Results were off somewhat in the first half of 1997, when the group contributed $34 million.
But analysts said expenses have been high and sales growth sluggish.
BankAmerica last overhauled its wealth management business in late 1995, when it consolidated trust, private banking, and asset management under Alexander M. Anderson, who was recruited from Wells Fargo & Co. a year earlier. Now Mr. Anderson, a group executive vice president, plans to leave BankAmerica by yearend.
"I don't know where to place the blame," said Thomas K. Brown, analyst at Donaldson, Lufkin & Jenrette, New York. "They brought Alex (Anderson) in to improve things because he had a good track record. Since his arrival the growth has still been disappointing."
Mr. Anderson was on vacation and unavailable for comment. A BankAmerica spokesman said the bank "never responds to those kinds of comments."
Robertson Stephens' investment management business is much smaller than BankAmerica's. The investment bank has $4 billion of assets in public mutual funds and private limited partnerships under management; BankAmerica manages $63 billion.
Differences of scale aside, Robertson Stephens fills some gaps in investment styles and sophistication. For instance, Robertson's equity mutual funds hold triple the assets of BankAmerica's proprietary stock funds. The banking company, which manages $13.9 billion in mutual funds, is known mostly for its money market portfolios, which make up 86% of its fund assets.
"It's to BankAmerica's advantage to incorporate and integrate Robertson Stephens in as many ways as possible," said Heather Hiles, a senior consultant with Spectrem Group, San Francisco.
Other observers said the move to place an outsider, Mr. Hecht, at the helm of all asset management is reminiscent of the appointment last year of former Wall Street broker Dennis Mooradian to a similar position at crosstown rival Wells Fargo & Co.
"Not only is it in vogue, it's probably very appropriate," said a senior wealth management executive. "To accomplish their sales and distribution goals," he added, banks need executives with "nontraditional" expertise and talent.
Mr. Hecht will report directly to David A. Coulter, BankAmerica chairman.
"With his expertise and with the creation of the asset management group," a bank spokesman said of Mr. Hecht, "our staff of private banking and investment management professionals will be responsible to a broader range of customers."
BankAmerica promoted group executive vice president Mr. Goodyear to head global private banking. Mr. Goodyear, currently private banking market manager for Chicago, will report to H. Eugene Lockhart, who was named president of the global retail bank in March.