03.01.2008 15:00 Real Estate
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William Hunt, who had led the State Street Global Advisors unit, resigned Wednesday after nearly three years in the job, the money manager said.
James Phalen, 57, head of international operations for investment servicing and investment research and trading, was named the unit's interim president and chief executive. He reports to Ronald Logue, State Street's chief executive.
The 71-cent-per-share charge addresses legal and other costs related to exposure to and illiquidity in subprime mortgages, State Street said.
It also addresses "customer concerns as to whether the execution of these strategies was consistent with the customers' investment intent," the company said.
State Street joins a growing list of financial services companies to record losses tied to deteriorating global credit markets.
The Boston-based company is the world's largest money manager for institutions, with about $2 trillion of assets under management as of September 30. It is also one of the world's largest providers of custody services for institutional investors, overseeing $15.1 trillion of assets.
State Street expects 2007 profit of $3.42 to $3.45 per share. Excluding the charge, merger costs, and tax adjustments, it expects operating profit of $4.54 to $4.57 per share.
Analysts on average expected profit of $4.20 per share, according to Reuters Estimates. It wasn't immediately clear on what basis this amount was calculated.
Hunt took over State Street Global Advisors at the end of January 2005, when he was 42. He joined the company in 1994.
According to a regulatory filing, he is entitled to severance and benefits valued at about $14.1 million. He also agreed not to work for a competitor for 18 months, but may establish a hedge fund after six months or join an independent hedge fund after 12 months, the filing said.
State Street shares closed Wednesday at $78.88 on the New York Stock Exchange.
(Reporting by Jonathan Stempel; Editing by Derek Caney)
