As part of its effort to expand assets and improve overall performance, Prudential Investment Management, the portfolio management arm of Prudential Financial, has hired a veteran municipal bond professional to join its Newark, N.J., headquarters.
Robert Germano, 56, of Morganville, N.J., brought his 30 years of portfolio analysis experience to Prudential on Monday.
Germano joins the firm as a vice president and will manage a variety of open-ended tax-exempt portfolios. He will report to Robert Waas, managing director of the municipal bond department, which also includes portfolio manager Lorely Machin. The department currently has $5 billion in assets .
Germano's addition to the group fills two voids, according to Waas. He not only replaces former portfolio manager Scott Diamond, who left the firm in January to work for Goldman, Sachs Asset Management, but also adds a senior member to the team at a crucial time.
"We now have the team in place to make great strides in enhancing performance and assets and growing the municipal business," Waas said.
In addition to an array of state-specific funds, the firm manages national, high income, and insured funds.
The largest is its $850 Prudential Municipal High-Income Fund. The class-A shares ranked 18th in a peer group of 75 and posted a 1.21% cumulative total return compared with the 0.91% average cumulative total return of the peer group for the period between Dec. 31, 2001, and March 21, 2002, according to Lipper Inc.
Meanwhile, the class-A shares of its second largest fund, the $650 million Prudential National Municipal Fund, ranked 36th in a peer group of 289 and posted a 1.00% cumulative total return, compared with a 0.75% average cumulative total return for the same time period.
Waas manages the national portfolio, as well as the high-income fund, and two California funds, while Machin manages the Pennsylvania tax-exempt fund.
As part of its growth spurt, Prudential, under Waas' leadership, is also busy developing a new area of the business that offers individually managed portfolios to individual high-net-worth investors. Machin is also the portfolio manager for that product.
Prior to joining Prudential, Germano was the owner and operator of Germano Municipals Corp. in Holmdel, N.J., from 1989 until he sold the business early last year. He remained active, however, in the market by trading a variety of investments, including municipals, for his own personal portfolio over the last year.
As a generalist, Germano provided sector, credit quality, and market analysis used in restructuring and improving portfolio performance to some of the biggest mutual fund families in the industry, such as Merrill Lynch Asset Management, Dreyfus Corp., Colonial Management Associates, and Fidelity Management & Research Co.
Before opening his own shop, he also provided portfolio and market analysis to some of the same fund managers at large mutual fund families while working first as an institutional salesman and later as an institutional sales manager at some of the former big Wall Street firms, which are now either defunct or merged with other companies, such as Dillon Reed, Lazard Feres, Drexel Burnham and Shearson Lehman.
Germano started in the industry in 1972 at Manhattan-based Park Ryan, a small municipal bond shop that specialized in sinking fund bonds.
Friends and colleagues in the municipal market for 17 years, Waas and Germano are counting on each other's experience to grow the business.
" Waas is a man who is confident he knows where he wants his department to go and having spoken to the powers that be, they are also confident they know where they want the company to go ... They want to be a bigger and better money manager," Germano said.
Other observers say the Germano-Prudential union is a winning combination, and will be instrumental in the firm's overall mission to improve assets and performance on the heels of going public.
"They are experiencing a tremendous rebuilding effort," said one industry insider. "They are gaining a growing reputation for outstanding performance since having gone public and they are on the right track to growing their assets."
