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BNY is changing the leadership of a large UK pension fund unit as the US bank seeks to become a bigger player in the global investment management and wealth industry.
Abdallah Nauphal, the longtime chief executive of BNY-owned Insight Investments who is known as the “Godfather” of liability-driven investment products — which seek to match income and assets with future obligations — would retire later this year, the company said. Nauphal, 64, is being replaced by Raman Srivastava, 49, who is joining from Canadian Insurance firm Great-West Lifeco, where he was the global chief investment officer.
Insight, which has $900bn under management, is one of the largest players in the LDI industry, which serves defined pension schemes, and along with other firms came under significant stress during the UK’s government bond market turmoil in 2022 that began with then-prime minister Liz Truss’s disastrous “mini” Budget.
The change comes as BNY is seeking to better integrate its investment management units, which have long been run separately and of which Insight is the largest, with the rest of the bank. Last year, the bank combined its private bank and investment management businesses under a new leader, Jose Minaya, who joined BNY in September from asset manager Nuveen.
Hanneke Smits, who has been the head of BNY’s investment management division, left at the end of 2024.
Minaya says BNY’s investment division, which has $2tn in assets under management, has grown to its present size with very little cross selling between its seven assets management units, the private bank and the larger firm.
“The reason I am here is to help the collective grow faster,” said Minaya. “We can provide a basket of services that is much more valuable as a whole.”
Nauphal, who fled Lebanon as a teenager in 1978, joined Insight in 2003 as its chief investment officer, and became its top executive four years later. Insight, which had about $95bn under management at the time, was bought by BNY in 2009.
Under Nauphal, Insight’s assets under management grew nearly 10-fold, as the firm championed the idea that pension funds could lower their perceived deficits and smooth the volatility of their returns by putting their assets in a portfolio of hedged higher yielding long-term bonds.
But LDI strategies, which rely on the complicated hedges to counter interest rate moves, have come under fire since 2022, with critics saying the investment approach increases risk and adds to market volatility.
Nauphal told a House of Commons committee in 2022 that his firm maintained “a more conservative buffer” than rivals. In fact, Insight obscured its losses at the height of 2022 gilt market turmoil by temporarily altering the way it valued its holdings, something the firm has said was appropriate but that rivals have said has brewed distrust in LDI products.
Insight’s assets under management fell nearly 30 per cent in 2022, though they have regained about half of that drop since.
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