No doubt State Street Global Advisors will remember 2007 as the year of turmoil. It's ending with a little intrigue.
First, the State Street Corp. investment arm's fixed income group suffered through a meltdown during the subprime crisis. Now, a team of international stock managers running big money for clients has hit the door.
Former managing director Paul Moghtader left and took portfolio managers Craig Scholl, Taras Ivanenko, Peter Kashanek, and Alex Lai with him to Lazard Asset Management this week. Trade publications say they managed $35 billion, though State Street doesn't offer a number.
Then there is Christopher Pope. He's the really intriguing part.
Pope also joined Lazard this week to lead client service and business development. He left a job as president of a small investment unit owned by Boston Private Financial Holdings Inc., but previously worked as director of US institutional sales at State Street Global Advisors.
Pope left State Street in 2005 under circumstances that were never made clear publicly. The Globe's Steve Bailey reported at the time that he had been asked to resign.
So how did Pope manage to land at Lazard with a State Street crew at the same time? Did he, in fact, play a big part in arranging the deal that hurt his old employer?
I don't know, and the principals weren't talking about it to me. But the circumstances had industry insiders buzzing this week.
State Street has already filled the empty seats, naming experienced insiders Didier Rosenfeld and Mark Webster to senior positions in charge of the group that invests in developed markets outside the United States.
The defections may hurt business, maybe not. But the Massachusetts state pension fund, which invested $930 million in the strategy managed by the group, moved the money into a passive index fund yesterday and will reconsider who should handle it in the future.
This is the way it often works in the upside-down world of biotechnology and life science stocks:
First you get paid, and then you deliver. Individual stocks climb high on the prospects for a new product and then, hopefully, companies actually get their bright new ideas onto the market.
A year ago, I wrote about a high-flying Cambridge company called Advanced Magnetics Inc. It was the best-performing Massachusetts stock of 2006, climbing more than 400 percent. Investors were excited about a new treatment the company was developing to replace iron in the blood of patients with chronic kidney failure.
That product, called ferumoxytol, isn't on the market yet, but the company hit an important milestone when it filed its new drug application with the Food and Drug Administration yesterday. Regulators may take the better part of next year before they give an answer.
A lot has happened between the company's soaring 2006 stock performance and the application filed yesterday. For one thing, the company changed its name to AMAG Pharmaceuticals Inc. It also raised $162 million selling stock on the strength of the ferumoxytol story. Most importantly, it kept pushing its product forward.
One thing that didn't change much: AMAG Pharmaceutical's stock price. Though the shares had some ups and downs this year, they have gained just 2.5 percent so far in 2007.
The big payoff, as usual, had come up front.
The Red Herring Massachusetts people who work in the mergers and acquisitions business aren't as bullish as they used to be. Two out of every three who participated in the latest ACG/Thomson DealMakers survey still say the current environment is "good" or "excellent." But 95 percent said that just six months ago. Nearly 80 percent said they expect fewer buyouts in the next six months, and 95 percent anticipate more distressed deals.
Steven Syre is a Globe columnist. He can be reached at syre@globe.com.
