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JPMAM execs have the edge to replace Keating, sources say

 


Pensions & Investments | December 22, 2014


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​Several internal candidates at J.P. Morgan Asset Management (JPM) appear to be among the frontrunners to succeed Catherine Keating as CEO of investment management, Americas.

Ms. Keating announced on Dec. 8 that she will leave the New York-based money manager to become CEO of Commonfund, Wilton, Conn., on Feb. 1.

The internal candidates are said to include John Galateria, CEO of U.S. institutional asset management; Andrea Lisher, CEO of U.S. retail asset management; Kelly Coffey, deputy CEO of the U.S. private bank; and Phil DiIorio, CEO of global wealth management.

Most industry observers interviewed for this story said they believe someone from within the firm is likely to take over Ms. Keating's role. No one provided any likely outside candidates.

“I will bet on an inside pick,” Donald Putnam, a San Francisco-based managing partner of investment bank Grail Partners, said in an e-mailed response to questions.

“They may look outside to benchmark and cover their bases, which is essentially a best practice, but J.P. Morgan has a deep bench and likely has some compelling internal choices as well,” speculated Debra Brown, a managing director in the asset and wealth management practice at recruiter Russell Reynolds Associates, New York.

One source familiar with the matter told Pensions & Investments the business will be managed by Mr. Galateria and Ms. Lisher in the interim.

Ms. Keating, in a news release announcing her appointment, said: “I have long admired ( Commonfund's) mission and success over the past four decades. I look forward to joining the team, and working on the needs of endowment and foundation investors.” She declined to comment further.

JPMAM spokeswoman Kristen Chambers declined to comment.​

30% growth

Data from Pensions & Investments show the money manager's U.S. institutional tax-exempt assets grew almost 30% during Ms. Keating's tenure, which began in July 2011. The firm had $275.72 billion in U.S. institutional tax-exempt assets under management at Dec. 31, up from $212.31 billion at year-end 2011.

JPMAM is the sixth largest money manager in the world, according to the P&I/Towers Watson World 500. The firm had $1.71 trillion in total assets under management as of Sept. 30.

By contrast, Commonfund is a manager of managers whose clients primarily are endowments and not for profits. The firm's AUM has been flat, hovering a little below $25 billion during the three years ended Dec. 31, 2013. Some industry observers said Ms. Keating's move to CommonFund makes sense.

“J.P. Morgan has a fantastic platform. But to someone with an entrepreneurial urge, being the CEO of a smaller platform can be just as gratifying as being part of a larger platform,” said Ms. Brown. “So I can see why there's a draw.”

One investment consultant said, “At J.P. Morgan, it's hard to move the needle. At Commonfund, maybe she can move the needle.” The consultant added: “Money is probably less of a motivator at this stage of her career. Commonfund may be a place where she can work in the non-profit space and make a difference.”

Mr. Putnam noted: “The mission (of Commonfund) is not a business mission; it is half "financial services to universities' and half "portfolio managers without borders' in that there is more at stake than profits. It is a mission rooted in service to the beneficiaries.”

Although Ms. Keating has been with J.P. Morgan since January 2002, she has experience in the non-profit sector. She is now chairwoman of the Villanova University board of trustees and is on the boards of the Girl Scout Council of Greater New York and the Inner-City Scholarship Fund.

Ms. Keating will replace Commonfund CEO Verne Sedlacek, who is retiring after 12 years as CEO.

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JPMAM execs have the edge to replace Keating, sources say