Watson Wyatt has quietly exited the business of strategic consulting to fund management companies. The worldwide move was decided in the past few weeks. Its leading practitioner in Asia, Anthony Creighton, has recently left the firm and will join Credit Suisse Asset Management in Hong Kong.
Creighton says the firm did have the proper Chinese walls in place to ensure no conflict of interest. Nonetheless given the litigious mood in the United States and the United Kingdom toward fund management companies, and the zeal of regulators such as New York Attorney General Elliot Spitzer, the consultancy decided the relatively small business of advising fund managers wasn't worth being hauled over the coals in case someone wanted to make an issue out of it.
Rival consultants have long considered it a conflict of interest to accept pay from a fund manager on the one hand, and then recommend fund management houses to institutional clients on the other.
Naomi Denning, director and regional head of investment consulting, says Watson Wyatt is getting out of any work that could contain a conflict of interest.
(Other consultants carry their own baggage. Mercer Investment Consulting's parent, Marsh & McLennan, also owns Putnam Investments, while rivals have long criticized Russell for both consulting and promoting its multi-manager offerings simultaneously. Like Watson regarding fund manager consulting, these firms deny there is a conflict of interest.)
Creighton doesn't have an official position yet at CSAM, because he is now required by Hong Kong authorities to pass a licensing exam (one notorious for a ridiculously high fail rate). Once he is officially on board, he will work with Clayton Copplestone, director and head of business development for Asia ex-Japan, who is relocating to Hong Kong from Sydney in April.
Copplestone's initial job will be to review CSAM's global product line and determine how it can be deployed or adjusted to meet the needs of North Asian institutional investors, and Creighton's job to implement that plan and manufacture products for regional prospects. CSAM is now in the process of opening a Hong Kong office, its first in Asia ex-Japan.
Denning says Creighton was not let go. "Anthony could have stayed on," she says, noting he had other responsibilities such as research and other areas of advice.
For Creighton the move represents a return to the buy side after about two years in the consulting world. Before that he was a fund manager at Deutsche Asset Management in Sydney and Hong Kong.