Lazard Loses Two Tech Execs; Portia's Future Uncertain

Lazard Freres & Co.'s Lazard Freres Asset Management subsidiary has lost two top executives who were closely involved in technology decision-making at the firm; their departures cast doubt as to whether the firm will continue ongoing and extensive evaluations of Thomson Financial Systems Inc.'s Portia.

The two ex-Lazard executives are chief financial officer Kevin Blanchfield, who left his post three weeks ago, and head of systems Lu Ann Gilhooly, who left a short time before that.

Assuming Blanchfield's responsibilities at Lazard Asset is David Marchiony, who joined the firm last week. Formerly of McKinsey & Co., Marchiony will head administrative areas for Lazard Asset. He will report to another ex-McKinsey executive, senior vice president Robert Warshaw, who joined the firm in October. Both will be involved in technology decision-making at the firm.

Gilhooly formerly managed Lazard Asset's tests of Portia; most recently, she led the firm in scrutinizing Portia's Advanced Platform Option (APO). Blanchfield--who'd been the firm's CFO for the past 18 months--was also engaged in the portfolio management and accounting system evaluation process.

Lazard officials did not return calls seeking comment. Sources say the departures of Blanchfield and Gilhooly came as a surprise to some within the firm.

While the reasons behind Blanchfield's exit remain unclear, sources say he may have been frustrated by the heavy-handed role parent company officials had been taking in the day-to-day operations of the asset management subsidiary.

Reasons for Gilhooly's exit were also difficult to pin down at press time. Some sources say she was dissatisfied with the tests of Portia APO. According to one source close to the project, Gilhooly "had nothing good to say about the [Portia APO] system." Among other problems, this source says Gilhooly felt that Portia APO was providing inaccurate performance measurement numbers. Gilhooly's current whereabouts could not be determined at press time.

Meanwhile, Blanchfield has joined Global Asset Management Ltd. (GAM), a U.K.-based money management firm, where he assumes the role of chief operating officer. Sources say he will be involved in an expansion of the firm's U.S. operations. At GAM, Blanchfield joins another ex-Lazard official--Clark Winter, Jr.-- who was previously senior vice president of marketing at Lazard Asset. GAM named Winter president of its U.S. division last June.

Sources say that the number of technical people on staff at Lazard Asset has been minimal because the firm's incumbent portfolio accounting system--Shaw Data Systems Inc.'s On Line--is service bureau-based and so requires little in-house maintenance. When necessary, Lazard Asset has relied primarily on systems people from its parent for technical assistance.

In 1992, Lazard hired Blanchfield to oversee an effort to "get the systems under control," says one source--and to do an evaluation of Shaw's On Line to determine how well it was serving the needs of the firm. Later on, Gilhooly was moved to head systems and was charged with overseeing the tests of Portia.

Lazard began tests of Portia's DOS-based portfolio management system this past spring; sources say the firm was looking to install the Unix-based Portia APO this September. The firm did take delivery of an early release of the system in July, but there were problems with the system (IMT, Oct. 1).

Thomson was to deliver a revised version of the system some time in October. One source familiar with Portia now says that the release of Portia APO has been postponed for at least six months.

The latest management departures may point to an uncertain future for Portia APO at Lazard. It was Gilhooly who attended the Portia Users' Conference held Sept. 22-25 in Boston (see related story, this issue).

Lazard has held discussions with several vendors, among them Data Exchange Inc., Maximum Data Corp. and Shaw Data. Officials at the firm have also attended conferences to view vendors' wares, such as the Financial Investment Management Conference held in New York City last September.

Lazard is mainly interested in a new system which it can run on Unix servers, sources say. However, these sources say it is unlikely that a decision regarding a replacement system will be made soon.