Retirement of Virtus CEF indie completes board-level absorption of AllianzGI funds

Virtus indie Geraldine McNamara steps into the spot on seven boards left open by the retirement of Alan Rappaport, the last of the former Allianz GI trustees

Independent trustee Alan Rappaport has retired from the boards of seven Virtus closed-end funds and been replaced by veteran Virtus trustee Geraldine McNamara, according to recent filings.

His retirement on April 8 effectively marks the end of a $3.5bn cluster board that formed in 2020, when Virtus Investment Partners acquired Allianz Global Investors’ retail fund complex, comprising 25 open-end funds and seven closed-end funds, as part of a distribution partnership.

In the resulting shuffle, the Virtus fund board took on three AllianzGI trustees — Sarah Cogan, Deborah DeCotis, and F. Ford Drummond — to help oversee all 103 funds in the Virtus complex. The other five members of the AllianzGI board — Rappaport, Hans Kertess, Davey Scoon, James MacLeod, and William Ogden IV — remained to oversee only the seven closed-end funds Virtus acquired from AllianzGI.

Kertess and Scoon retired in 2021, while MacLeod and Ogden retired in 2022, leaving Rappaport, 70, as the last of the original AllianzGI trustees.

Rappaport joined the AllianzGI board in 2010, serving as chair of the closed-end funds from 2019 to 2022. He still sits on the boards of 29 closed-end funds managed by AllianzGI affiliate PIMCO, where he has also been an independent trustee since 2010.

He has been an adjunct professor at New York University Stern School of Business since 2011 and a lecturer at Stanford University Graduate School of Business since 2013.

Rappaport was an advisory director at private investment firm Roundtable Investment Partners from 2009 to 2018. He previously headed private banking at Bank of America from 2001 to 2008, wealth management at investment bank The Beacon Group from 2000 to 2001, and asset management at CIBC Oppenheimer Corp from 1982 to 1999. He began his career at brokerage Smith Barney, Harris Upham & Co., in 1978.

The boards of the Virtus AllianzGI funds now include independent trustees McNamara, 72; Cogan, 67; DeCotis, 71; Drummond, 61; Keith Walton, 59; Brian Zino, 71; and chair Philip McLoughlin, 77.

McNamara, who has been a Virtus trustee since 2001, in January became the fourth Virtus mutual fund board to take seats on the former AllianzGI boards since the deal, following Walton, Zino and McLoughlin.

McNamara currently serves as an independent trustee for two of the seven funds and as a non-voting board member for the other five.

The board’s only interested trustee is George Aylward, president and CEO of Virtus Investment Partners.

The funds’ CCO is Timothy Branigan.

The board maintains five standing committees: audit, compliance and risk oversight, contracts, governance and nominating, and performance.

Total compensation for independent trustees varied due to the different assignments within the Virtus fund complex, but trustee compensation from the seven former AllianzGI closed-end funds ranged from $62,500 to $175,000 for the fiscal year ended Jan. 31, 2023.

Virtus is an investment firm based in Hartford, Conn., that advises and distributes investment products managed by its roster of boutique asset managers. It managed $149.4bn across its 13 affiliates at the end of 2022.

After transferring ownership of the funds to Virtus, AllianzGI continued to manage them in a subadvisory capacity until 2022, when the firm sold its US fund operations to Voya Investment Management after pleading guilty to SEC charges of securities fraud connected to the collapse of its Structured Alpha funds group at the start of the pandemic.

Alan Rappaport

• Independent trustee, Virtus/AllianzGI Funds, 2010 – 2023
• Independent trustee, PIMCO Funds, 2010 – Present
• Lecturer, Stanford University Graduate School of Business, 2013 – Present
• Adjunct professor, New York University Stern School of Business, 2011 – Present
• Advisory director, Roundtable Investment Partners, 2009 – 2018
• President – Private bank, Bank of America, 2001 – 2008
• Managing director – Wealth management, Beacon Group, 2000 – 2001
• Managing director – Asset management, CIBC Oppenheimer Corp., 1982 – 1999
• Vice president, Smith Barney, Upham Harris & Co., 1978 – 1982