A troubled asset management subsidiary of Mellon Bank Corp. has hired a respected investment chief to help it revive.
The Boston Company Asset Management has announced it has hired Alexander "Toby" Webb 3d to replace Desmond J. Heathwood, who in April lead a mass defection of money managers following a dispute about control of the unit.
Mr. Webb, who starts his new job as chief investment officer in September, is currently president and chief investment officer at Fidelity Management Trust Co.
During a phone interview, he did his best to downplay the problems plaguing the Mellon unit - which include a loss of clients and an outflow of billions of dollars in the last two months.
"What I want people to focus on is that 60% to 70% of the clients before the transition are still there," Mr. Webb said.
"There are, obviously, clients who voted with their feet and that's their prerogative. But the investment process is there and did not depart with the group of money managers that left."
The unit has been without a head of investment ever since Mr. Heathwood and nine other top executives left to start their own firm, following their unsuccessful bid to buy the unit that caters to institutional clients.
The defectors reportedly took with them 10 staff members and an estimated $3.4 billion in accounts. Overall, the money management unit suffered an outflow of $11 billion.
Officials at the the money management unit said it oversaw $15 billion in assets as of June 30, about 42% less than at the end of April.
Sources familiar with money management industry welcomed Mr. Webb's appointment, praising his ability to lead and his versatility.
A Raleigh, N.C., native, Mr. Webb previously spent 17 years at State Street Research.
"Today marks the beginning of people recognizing that the Boston Co. is very much a strong asset management firm and one that is as strong as the one they always thought of when they thought of the Boston Co.," said Christopher "Kip" Condron, chairman and chief executive officer of the asset management unit.