Pru Pulls a $1.3 Billion Subadvisory Gig from Pimco
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Thursday, August 19, 2010

Pru Pulls a $1.3 Billion Subadvisory Gig from Pimco

Come September JP Morgan Investment Management will be replacing Pimco on a $1.3 billion subadvisory mandate with Prudential Investments [see profile]. The mandate covers the AST High Yield Portfolio that is used as part of the Newark, New Jersey-based insurer's variable annuity product line. [SEC filing]

Prudential did not provide an explanation for the change. However, the portfolio has underperformed its peer group, according to Morningstar data, and it carries just a two-star rating. Prudential acquired the AST trust when it purchased American Skandia.

The Pimco PM handling the fund is EVP Andrew Jessop, who signed on at Pimco from Goldman Sachs Asset Management in 2009. Jessop was the co-head of GSAM's high yield group before making the move.

J.P. Morgan Investment Management and Prudential Investment Management are set to take over the mandate on September 13, 2010. Prudential will run 60 percent of the portfolio (roughly $780 million) while JP Morgan will take over the remaining 40 percent (about $520 million).

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