Exclusive: Guggenheim Partners working to quell investor concern about management

From Reuters - December 14, 2017

NEW YORK (Reuters) - Top executives at asset manager and investment bank Guggenheim Partners LLC are working to quell clients concerns about the fate of their chief executive officer and about an ongoing examination by U.S. securities regulators.

A top investment consultancy and at least four of Guggenheims institutional clients have said they are closely monitoring developments, with one saying the work environment at the Chicago and New York-based company has indeed deteriorated.

Some investors, including the Sonoma County Employees Retirement Association in California, and the South Carolina Retirement System Investment Commission, formally put Guggenheim on watch lists, keeping a closer eye on performance than usual, documents seen by Reuters show. The moves could lead to those firms cutting ties with Guggenheim, which oversees $295 billion in assets.

Guggenheim relationship managers, a top lawyer and even its global chief investment officer, Scott Minerd, are working to address clients concerns after months of bad press, according to documents seen by Reuters and interviews with clients and executives.

Im sure theyre saying the same thing to everybody, said Steven Turi, chief investment officer for SkyView Investment Advisors LLC, a longtime Guggenheim client. Theyve been trying to deal with it.

Closer scrutiny by pension plans, investment consultants and other investment firms shows Guggenheim may have more work to do to assuage investors concerned about the status of chief executive Mark Walter.

I dont want to see any client of ours unhappy, Minerd said in response to one pension fund clients concerns, which Reuters raised in an interview this week. I will meet with them.

Gerard Carney, managing director and spokesman at Guggenheim Investments, later added that Minerd, Guggenheim Investments President Jerry Miller, and assistant chief investment officer for fixed income Anne Walsh as well as our client service teams have been very proactive in engaging and communicating with clients to ensure that they understand our positioning, clear up any mischaracterizations and ensure we listen to and address any concerns.

He said public pension assets are about 1.4 percent of Guggenheims overall assets under management.


A source told Reuters in September that at least one member of Guggenheims board of directors pressed Guggenheim CEO MarkWalter, an owner and the chairman of the Los Angeles Dodgers baseball team, to resign after he became the subject of news coverage. A spokesman rebutted that source, saying Walter was not being pushed out of the investment firm he helped found.

That report followed a Financial Times story in July that said there was a power struggle between Minerd and Walter. Both men denied that report.

When asked on Tuesday about Walters future, Minerd said: I think Mark will be involved with the firm. Will he be CEO? Probably not forever. Mark has other business interests.


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