AMERICAS NEWS: Real changes in real assets

Last month, JPMorgan Asset Management informed its investors that it was making major changes to its global real assets (GRA) business – chief among them that Joe Azelby, the head of the platform, was retiring in early 2017.

Azelby, a 54-year-old former linebacker with the National Football League’s Buffalo Bills, had spent his entire post-NFL career with the New York-based asset management firm, which he joined in 1986. In 1998, he assumed leadership of JPMorgan’s US real estate business, with approximately $20 million in revenue, and transformed it into a global real assets platform that generated more than $500 million in revenue in 2015. The GRA group currently comprises 500 investment professionals in 20 cities worldwide managing more than $95 billion in assets, according to Azelby’s LinkedIn profile.

JPMorgan is not planning to replace Azelby. Instead, the individual GRA businesses – including real estate, infrastructure and maritime investing – will report to Anton Pil and Chris Hayward, managing partners of JPMorgan’s global alternatives platform, which also includes private equity, hedge funds and liquid alternatives. Specifically, the private real estate investment teams in the Americas, Asia and Europe; its public real estate investment trusts business, Security Capital; and global infrastructure team will report to Pil, according to a note from consulting firm Callan Associates.

JPMorgan declined to comment, but multiple sources familiar with the matter said that the GRA group will now operate as two separate silos – investment teams and support services teams.

The new structure is understood to be a departure from GRA’s vertically integrated model. “They were almost entirely autonomous,” said one former GRA executive. “They did some basic client reporting on the broader JPMorgan platform, but they were pretty self-contained.”

Other changes within the GRA business included a new leadership structure. For example, the infrastructure team – which previously consisted of its OECD infrastructure debt and equity and Asian infrastructure units – was unified under a new global head, Paul Ryan. Global heads for the specific asset classes did not previously exist in the GRA group, PERE’s sources said.