Deals & People May 9, 2013

TIAA-CREF Names Head of Asset Management

Robert Leary has been named executive vice president and president of TIAA-CREF Asset Management.
Reported by

Leary will start in his new position on June 24, based in the company’s New York headquarters. He will report to CEO Roger W. Ferguson Jr. and serve on the company’s executive management team.

“Rob’s proven track record successfully working with and leading asset management, retirement and insurance organizations, combined with his global view and focus on risk management, makes him an outstanding addition to our organization,” Ferguson said. “We look forward to his leadership as we work to meet the evolving needs of our individual and institutional clients.”

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Leary, who has more than two decades of industry experience with both institutional and individual clients, will oversee all aspects of TIAA-CREF Asset Management. He will drive the group’s strategy across investments, distribution and operations, and aims to expand the company’s third-party business.

Leary most recently served as president and chief operating officer of ING U.S., leading all aspects of ING’s investment management, retirement, insurance and annuity businesses, as well as operations, information technology (IT) and marketing. He also has served as CEO of ING Insurance U.S. Leary joined ING in 2007 as chairman and CEO of ING Investment Management, Americas. He also served as a director of Pomona Capital, a private equity firm affiliated with ING.

Previously, Leary was an executive vice president at AIG. In this role, he helped build investment solutions for the institutional investor community. He also was a vice president at J.P. Morgan & Co., where he specialized in fixed-income applications. He started his career as an attorney with White & Case.

Leary holds a bachelor’s degree in political science from Union College and a law degree from Fordham University School of Law.

Products May 9, 2013

Invesco PowerShares Builds Out Fixed-Income Line

The PowerShares Fundamental Emerging Markets Local Debt Portfolio (PFEM) was unveiled by Invesco PowerShares, trading on the NYSE Arca. 
Reported by

The fund expands Invesco PowerShares’ fundamental fixed-income line with the emerging market local currency sovereign debt portfolio.

PFEM is designed to provide investors fundamentals-weighted exposure to emerging market sovereign debt denominated in local currencies. The fund has an expense ratio of 0.50% and is expected to issue monthly distributions.

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Emerging market sovereign debt represents an attractive asset class that can potentially offer higher yields and lower debt to gross domestic product ratios relative to most developed markets, according to Andrew Schlossberg, head of U.S. distribution and global ETFs at Invesco. “The portfolio is the first ETF to provide investors a fundamentals-weighted exposure to emerging market sovereign debt denominated in local currencies.”

Traditional bond indexes generally use some form of market-cap weighting, where constituent weights are a function of both the amount of debt issued and the debt’s current price. This approach can result in greater weights being assigned to issuers that have issued more debt. In contrast, the Fundamental Index approach developed by Research Affiliates LLC weights bonds based on each country’s economic footprint, resulting in a portfolio that is correlated to a country’s debt service capacity. 

Weighting by fundamentals gives higher portfolio weights to issuers with lower leverage and better debt service capacity, resulting in generally lower credit risk compared with the cap-weight benchmark, according to Shane Shepherd, senior vice president and head of fixed-income research at Research Affiliates. “A regular rebalance back to fundamental weights takes advantage of potential market inefficiencies in credit spreads by buying cheaper bonds and selling more expensive ones,” Shepherd said.

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