TCW Chief to Give Up Post, Remain Chairman

Robert A. Day, one of the pioneers of Los Angeles’ money management industry, said Tuesday that he would hand the reins of giant TCW Group to a younger team of executives on Oct. 1.

The shift comes as the company and other established money managers face growing competition from the army of hedge funds touting high-return investment strategies.

Day, 61, said 45-year-old Robert D. Beyer would succeed him as chief executive of TCW, which manages $115 billion in stocks, bonds and other investments for a roster of big-name clients worldwide, including Eastman Kodak Co., Cornell University and the California State Teachers’ Retirement System.

The company, parent of Trust Co. of the West, also manages the TCW Galileo mutual funds for individual investors.

In a second move, William C. Sonneborn, 35, will succeed Marc I. Stern, 61, as TCW’s president.

Day said the changes were part of a long-planned succession. Beyer, an alumnus of 1980s junk-bond leader Drexel Burnham Lambert, joined TCW in 1995 and was named chief investment officer in 2001.

Sonneborn, who has been TCW’s chief operating officer since 2001, came to the firm in 1998 from investment bank Goldman, Sachs & Co.

Day, who founded TCW in 1971, has taken an unconventional approach to the business by giving his money managers wide autonomy in developing investment strategies to lure and keep clients.

“Institutions look at TCW less as TCW and more as individual products and investment managers,” said Michael Rosen, a principal at investment consulting firm Angeles Investment Advisors in Santa Monica. He said Day’s approach had helped to foster strong performance in many of the firm’s portfolios.

Even so, Day sought deeper pockets for TCW in 2001, when he sold a majority stake in the company to French financial titan Societe Generale.

The French parent, in a statement Tuesday, said it expected “continued strong leadership” from TCW’s new top team.

Beyer said that he would preserve Day’s business model and keep TCW “a home for entrepreneurial and talented money managers.” He said that was key to fending off the challenge posed by hedge funds, investment pools that have mushroomed in recent years by promising return-hungry institutions superior returns from often complex investment strategies.

TCW also offers so-called alternative investment portfolios, but the bulk of its assets are in high-quality stocks and bonds.

Beyer said he expected two changes to help raise TCW’s profile with potential clients. One is the hiring of Garrett Walls, 48, as director of institutional sales. Walls, who joined TCW last week, had headed the U.S. institutional business at JPMorgan Investment Management in New York.

In another shift, 45-year-old Jeffrey Gundlach, who has earned a reputation for having a hot hand as lead manager of TCW’s $40-billion high-quality bond portfolio, was named Tuesday to succeed Beyer as chief investment officer for the firm.

Day, whose family has long roots in Los Angeles -- he is the grandson of Superior Oil founder William M. Keck on his mother’s side and Addison Day, president of Los Angeles Gas Co., on his father’s side -- said he would continue as chairman of TCW Group. Stern will become vice chairman of the firm.

Day is well known outside TCW as chairman of the W.M. Keck Foundation, a Los Angeles-based philanthropic institution.