Ms Donohoe will take over from Kaysie Uniacke who relinquishes the post to assume a new role as head of GSAM’s fiduciary business.
Since becoming co-head of the European operation in September 2001, Ms Donohoe has overseen an increase of 87 per cent in assets under management in Europe from $60.6bn (€50.9bn) to $113.3bn (€95.1bn) at end-December 2005.
During her time at the European helm with co-head Ted Sotir, she has experienced both good and bad times.
She was instrumental in wooing the all-powerful Anglo-Saxon consultant community who were previously put off by Goldman’s secretive culture. Bringing consultants such as Mercer and Watson Wyatt on board helped GSAM break back into the British pension fund market following a period around the turn of the millennium when the firm was haemorrhaging UK mandates. Finding favour with consultants also helped Goldmans to promote its global tactical asset allocation (GTAA) and currency overlay capabilities which had achieved notable success in continental Europe.
Ms Donohoe has also been an enthusiastic champion of GSAM’s business model of specialist investment teams. This “village of boutiques” structure as the firm prefers to describe it, is of course not unique to Goldmans, having been claimed by other heavyweight investment houses such as UBS GAM, Northern Trust Global Investments and Axa Investment Managers.
She has also presided over a growing sub-advisory investment business which has seen GSAM make significant inroads into the UK and continental European markets with sub-advisory mandates from financial institutions such as Lyxor, Abbey, Skandia and GE .
But, despite making GSAM more consultant (and media) friendly, it has not been all plain sailing for the impeccably-presented American.
Performance problems across a number of strategies have plagued the firm over the last two years, resulting in the loss of pension fund mandates on both sides of the Atlantic. For instance, the £10.1bn British Coal Staff Superannuation Scheme decided to pull a £5.4bn global fundamental equity mandate from the firm between 2003 and 2004, citing a loss of confidence in the product. And last year, the London Borough of Hammersmith and Fulham withdrew a £130m active global equity brief, while the London Pension Fund Authority decided to switch from sluggish long-only equities to Goldman’s quantitative investment process, which uses short positions to increase returns from long-only portfolios. In the US, Arizona’s $21bn state retirement system pulled a $300m active equity mandate.
GSAM recently closed one of its GTAA products for fear that continued growth and rising trading costs would undermine performance.
Setbacks aside, assets under management at GSAM worldwide rose by 18 per cent to $532bn in 2005, while the firm claims to have won
288 institutional mandates in Europe between end June 2001 and end June 2005.
Other personnel changes will see Stephen Fitzgerald, head of the IMD Asia, becoming the head of GSAM International, overseeing Asia and Europe. He joins Ted Sotir, who remains Co-head of GSAM Europe. Mr Fitzgerald will continue, at present, to be based in Hong Kong, but will relocate to London in the coming months. Prior to his current role, he spent eight years as the chief investment officer for global fixed income and currency.
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