Banks interested in building a money management business might do well to take a few pointers from someone who's walked down that road.
Richard C. Caldwell, the chairman of Pittsburgh-based PNC Bank Corp.'s asset management unit, starts with the premise that money managers are a breed apart from traditional bankers.
"Money managers are worriers," Mr. Caldwell said in a recent interview at American Banker's headquarters in New York. And that, he said, means they need lots of encouragement when times are bad.
What are some of the characteristics a bank should consider when building a team of money managers?
According to Mr. Caldwell, an asset management group should be made up of seasoned but "reasonably young" managers who work hard, don't demand large salaries, and develop strong institutional clientele.
Stock-picking talent, he says, is the not the end-all reason for hiring a money manager since performance fluctuates with the markets.
Mr. Caldwell said that PNC's recent acquisition of BlackRock Financial Management has worked out better than he thought it would. PNC paid $240 million in cash and notes for the unit.
According to Mr. Caldwell, BlackRock has been acting as adviser to Kidder, Peabody & Co., on the disposal of the brokerages' troubled mortgage-backed securities portfolio.
And this month, BlackRock won $1 billion in institutional business from Freddie Mac and Orange County, Calif.
BlackRock, which according to Mr. Caldwell brought $26 billion of fixed- income assets to the marriage, increased PNC's assets under management to $79.8 billion.
That makes PNC the fifth-largest U.S. bank money manager and the second- largest U.S. bank mutual fund manager, with $35.8 billion in mutual funds under management.
BlackRock has already been put to the task of setting PNC's fixed-income investment policies and helping PNC's staff run all of its bond mutual funds and common trust funds.