02/17/2012

Goldman Acquisition Costs Jobs at Dwight

Many of Dwight Asset Management’s structured-product professionals will be out of work once the investment shop is sold to Goldman Sachs.

The cuts would accompany broad layoffs that are expected to encompass about 40 members of Dwight’s 100-person workforce. Those affected were told of their fates shortly after the firm said on Feb. 8 that it had agreed to sell itself to Goldman in May.

Among them was structured-product investment chief Paul Norris. Another member of the group, commercial mortgage bond specialist Jason Golder, was told that he could keep his job. But he’ll likely have to move to New York, as Goldman is expected to shutter Dwight’s current headquarters in Burlington, Vt. There is no word yet on Peter Hassler, who manages investments in home-loan securities.

Outside the securitization area, chief economic strategist Jane Caron is being let go. So are a range of investment analysts and virtually all sales and business-development staffers.

Dwight specializes in running fixed-income investments for institutional clients, with a focus on “stable-value” accounts managed on behalf of retirement plans. Its holdings include a range of government and corporate debt, along with asset-backed bonds, home-loan securities and commercial mortgage paper.

Like many structured-product investors, Dwight lost money betting on mortgage bonds heading into the credit crisis — even though many of those holdings resided in a stable-value product that aimed to offer clients insulation from market volatility. That program had formed under the leadership of chief investment officer David Kilborn, who left in 2008.

Goldman is buying Dwight, currently a unit of Old Mutual, in a bid to increase the amount of capital it runs for retirement plans. Along with public and private pension systems, Dwight manages capital for insurers, endowments and other institutions. The 29-year-old operation oversees a total of $42 billion. London-based Old Mutual has been selling assets for some time in an effort to pay down debt and focus on its core alternative-investment business.

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