Magazine article American Banker

N.Y. Life: Unit Rebranding Plan Isn't Prelude to a Sale

Magazine article American Banker

N.Y. Life: Unit Rebranding Plan Isn't Prelude to a Sale

Article excerpt

Byline: Ken McCarthy

The plan by New York Life Insurance Co.'s investment management arm to change a subsidiary's name has some industry observers speculating the subsidiary could be for sale.

New York Life Investment Management announced last week that its equity investors group will be renamed Madison Square Investors on Jan. 1.

Russ Prince, the president of Prince & Associates Inc., a consulting firm in Redding, Conn., said that in the current climate, everybody could be available for the right price.

"Let's get serious, the money management business is shot to hell," he said. "They may not be on the market today, but that doesn't mean they couldn't be. People are pitching and looking all over the place. If the right numbers come along, they would do it."

Tony Elavia, the chief investment officer of New York Life Investment Management's equity investors group, who would become the chief executive officer and chief investment officer of Madison Square Investors next year, denied that the name is being changed with an eye toward selling the unit.

"We're not doing this to lead to a cleaner dismantling," he said. "That's not part of our strategy...I've never thought of ourselves as being up for sale."

Mr. Prince said that companies like New York Life can try to maintain a certain business model, but the captive system is shot. The issue companies face is how to sell firms, he said, and it is easier to sell them in pieces.

Mr. Elavia said the name is being changed to make the subsidiary more distinct and for branding purposes.

Eventually, New York Life Investment Management plans to set up a phantom equity stake arrangement for Madison Square's portfolio managers, he said, and its long-term incentive plan could be tied to its performance. "That way people feel like they are part of the smaller group, and their fortune is linked to that. …

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