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Thursday, February 13, 2003


3 Bankoh investment
managers leave jobs

The departures include
the head of the bank's
investment department


By Dave Segal
dsegal@starbulletin.com

Three key members of Bank of Hawaii's Asset Management Group, including the head of its investment department, will leave the bank at the end of the month.

Bank of Hawaii Their departures come at a time when the investment division has been under pressure to improve its equity performance. However, Dave Zerfoss, who oversees more than $7 billion in assets and co-manages the Pacific Capital Value Fund with Derwin Osada, said his and the others' departures have nothing to do with performance. The 56-year-old Zerfoss, who has been at the bank for about 34 years, said he's retiring.

Yvonne Lim, who manages the Pacific Capital Tax-Free Securities Fund and the Pacific Capital Tax-Free Short Intermediate Securities Fund; and Lorene Okimoto, group leader for the fixed-income group, also will be stepping down.

In addition, Bill Barton, the chief investment officer, will retire in May.

Zerfoss said it was coincidental that three of the AMG members were leaving at the same time.

"There have been a lot of management changes in our shop, and in the bank in general, in the last couple years and none of these have anything to do with the basic investment management process," he said. "But they do impact your time and commitment. It was getting to the point where I was asked to do a lot of things not involved with that and ... I didn't want to do it. Fortunately, I was in a position where I had enough money to retire. ... I can credit Bank of Hawaii's stock for that."

Zerfoss also defended his investment record, saying "even Peter Lynch had a bad year once in awhile. Any suggestion that I was encouraged to leave is erroneous," he said. "I've been in this business for 30 years and I'd be happy to stand on my record."

Michael O'Neill, Bank of Hawaii's chairman and chief executive officer, said the bank already has identified "a first class, municipal cap bond trader" who will be named next week to replace Lim.

"This is a business where you typically have a lot of turnover," O'Neill said. "This has been a very tough market for people. It takes its toll after awhile. These people get a report card everyday and, psychologically, it's pretty hard."

Zerfoss described Lim and Okimoto as the No. 1 and No. 2 worldwide experts on Hawaii municipal bonds.

Donna Tanoue, vice chairman for the investment services group, acknowledges that Asset Management Group has had mixed results.

"On the fixed-income side, our performance has been in the top quartile and has been excellent," she said. "Our equity performance has lagged and we are aggressively addressing that."

The state Employees' Retirement System trustees voted Monday to send a warning letter to Bank of Hawaii that the bank's Pacific Century Trust fund needs to improve its performance or will be dropped. The ERS board already had placed Pacific Century Trust on its watch list due to Pacific Century's organizational changes. Pacific Century Trust, which is a large-cap growth fund, manages nearly $68 million in ERS assets.

"We're in this business for the long term and we've been in this business for a long time and we're committed to it," Tanoue said.



Bank of Hawaii



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