John Mousseau, who has more than three decades in the investment management industry, has been chosen to take the helm of Cumberland Advisors, where he has spent nearly the last 18 years as portfolio manager and director of fixed income.
The promotion of the municipal market veteran comes as the firm celebrates its 45th anniversary and embarks on a “long-considered succession plan,” according to co-founder David Kotok.
Kotok remains chairman of the board and chief investment officer, while Mousseau has assumed the day to day responsibilities of the Sarasota, Fla.-based firm, which has over $3 billion of assets under management as of April.
“The best way to insure the continuous delivery of a high level of quality service to our clients is to execute a well-thought-out succession plan,” Kotok said in a June 11 news release. “Many firms wait too long and become reactive to unfortunate events. At Cumberland, we want to be proactive, not reactive.”
Mousseau told The Bond Buyer on Wednesday that he is responsible for short and long-term investment decisions for the independent registered investment advisory firm that manages fixed income and equity accounts for individuals, institutions, retirement plans, nonprofits, and government entities.
“We have worked on the mechanics for the last six months, putting the pieces in place to make it work,” he said.
“I’m steering the ship and signing off on all trading decisions and making the bigger calls on duration and direction, in addition to the day to day decisions, some more longer term in nature,” he added.
He has been running the bond department, which has $2.6 billion under management, since his arrival at the firm in 2000 and says none of that role has changed with his promotion.
“It’s like riding a bike and shifting the gears up,” he explained. He will continue to manage the bond department along with his new title.
Mousseau said Kotok continues his role as chairman and CIO, focusing on generating revenue and acting as a spokesperson for the firm -- apart from the day to day decisions and responsibilities -- but no less dedicated.
“He is still heavily involved in the firm and going as strong as ever,” the new president said, calling Kotok a “great model as a boss” due to his work ethic.
At the helm Mousseau has a vision to grow the equity side of the firm as much as it has the bond platform.
“We have developed some very good quantitative models on the equity side,” he explained. “Cumberland manages a majority of assets on the bond side - I would like to see equities grow to a more meaningful level,” he said.
He also expects to grow the bread and butter municipal bond business as higher demand continues to be fueled by the historic tax law, among other market conditions.
“One of the things that comes out of the tax bill is there’s less places where you can achieve a tax-free stream of income, and the muni bond has become more important and will become more important in everyone’s investment landscape,” he explained.
Mousseau expects to capture more business from baby boomers poised for retirement in which municipals will play a larger role with intermediate and longer maturities relatively cheap.
“With the elimination of SALT in high tax states, in-state munis become more important with wealthy taxpayers,” especially in California and New York, he added, referring to state and local tax deductibility.
The Federal Reserve Board’s rising rate cycle will also boost demand.
“Our thought process is that bond investors can do very -- well even with slowly rising interest rates,” Mousseau said Wednesday, as the Fed announced its plans to raise its fed funds rate by 25 basis points.
Prior to his promotion Mousseau was executive vice president, director of fixed income and portfolio manager at the firm, which also has an office in Vineland, N.J.
Prior to joining Cumberland, he was director of municipal bond management at Lord Abbett from 1993 to 2000, and vice president and director of portfolio analysis at E.F. Hutton from 1981 to 1987.
Mousseau began his career in 1980 as a securities analyst at ValueLine.
He earned economics degrees from Georgetown University and Brown University.