City National Rochdale hired a team of specialists from Invesco Ltd. to oversee its municipal high-yield fund, as the unit of City National Bank expands its muni team with the opening of a new Midwest office in Chicago.
The arrival of William D. Black, Brian Winters, and Doug Gibbs, will help increase the capabilities, depth, and market exposure of the City National Rochdale Municipal High Income Fund, the firm said in a press release last week.
The new hires will allow City National Rochdale to manage its municipal high yield fund, which was formerly sub-advised by Waddell & Reed, in house effective April 1. The fund debuted on Dec. 30, 2013 and had $755.6 million in assets, as of Dec. 31, according to the release. It typically invests in medium and lower-quality bonds, rated BBB-plus or lower by Standard & Poor’s, or if unrated, deemed to be of comparable quality.
Black, who most recently was the co-lead portfolio manager for the $7.5 billion Invesco High-Yield Municipal Fund from 2008 until Dec. 2015, will be senior portfolio manager, while Winters and Gibbs will be senior credit analysts.
Invesco declined to comment on the move by Black, Winters and Gibbs, the second muni team to leave in recent months. In October, Robert Wimmel, Tom Byron, and Brian Sipich exited their positions in portfolio and asset management to join BMO Global Asset Management. At Invesco, Wimmel was head of investment-grade municipals, and Byron and Sipich were members of the portfolio management team that together managed over $13 billion in U.S. tax-exempt open and closed-end funds.
While asset growth is City National Rochdale’s first priority in 2016, the firm looks forward to other opportunities to expand the existing 13-member municipal team, Greg Kaplan, director of fixed income, said in an interview. The firm manages $17 billion in fixed-income assets.
The addition of the three high yield specialists may eventually lead to the development of products customized to the needs of the firm’s clients and designed to take advantage of opportunities in the market, according to Kaplan.
“This fund was launched at the end of 2013 and has been an excellent addition to a well-diversified portfolio,” Kaplan told The Bond Buyer.
“The growth of the fund and the attractiveness of the asset class combined with CNR’s existing core competency in municipals made this a natural fit for the firm and our target client base.”
The move comes when strong performance, attractive spreads, and low volatility are boosting demand for the high-yield municipal sector, attracting inflows to the sector, while other fixed income asset classes have languished for the past two years.
“Our municipal high-yield bond fund has been an attractive investment for our clients and we are looking forward to having our own high-yield municipal team at City National Rochdale leading this important investment strategy,” Chief executive officer Garrett D’Alessandro said in the release.
Black, Winters, and Gibbs will be based in the Chicago office, which is scheduled to open next month.
City National Rochdale also has offices in New York, Beverly Hills, Lake Mary, Fla., Grand Rapids, Mich., San Francisco, and Houston.
The new team members are eager to put their experience to work.
“Our broadly experienced research team knows how to uncover opportunities in this thinly followed market,” Black told The Bond Buyer, adding that security selection will be the key to performance this year.
He said the team manages for credit risk and will remain cautious and underweight on Puerto Rico in the current market.
Instead, the firm sees opportunities in the life-care sector, as well as in select securitized tobacco bonds, according to Black, who brings more than 30 years of experience in the financial services industry, after beginning his career in 1984 as an investment banker specializing in municipal bonds.
As part of his long career, Black also worked at as a municipal bond analyst specializing in high yield securities at Van Kampen Investments Inc. and Invesco – after it acquired Van Kampen.
Winters, will put his 26 years of experience to work in high-yield municipal credit analysis in his new position as senior credit analyst.
Prior to City National he worked as a senior fixed-income analyst at Invesco. He began his career at Van Kampen Investments and he went on to work at Morgan Stanley, where he focused on municipal and corporate credit analysis.
Gibbs will join Winters in municipal credit research, after his latest role as senior analyst at Invesco. There, he led the acquisition and surveillance of non-rated and below-investment grade municipal credits for closed-end and open-ended mutual funds.
Gibbs also spent time on the other side of the market as an investment-grade municipal bond analyst at Van Kampen.
Black and Winters are members of the National Federation of Municipal Analysts, while Gibbs and Winters are members of the Chicago Municipal Analysts Society.
City National Rochdale is a wholly-owned subsidiary of City National Bank that was created in September 2013 after the merger of City National Asset Management and Rochdale Investment Management.
