PHILADELPHIA - One year after being acquired by Lincoln National Corp., Delaware Management Co., Philadelphia, is seeing some benefits from the deal.
The $10.7 billion mutual fund company has used Lincoln's money to seed several additions to its line of mutual funds and will continue adding, said Wayne Stork, chairman and chief executive officer.
While Delaware has seen some additional distribution from Lincoln's agents selling its products to the retail market, the real plus has been in expanding the product line with help from Lincoln, and perhaps from its other money management subsidiaries, he said.
The Fort Wayne, Ind., insurance company, which acquired Delaware Management Holdings last April, has provided seed money and, in some cases, expertise, to start new Delaware mutual funds.
Earlier this year, Lincoln money seeded Delaware's Labor Select International Equity Portfolio, a labor-sensitive international equity fund aimed at labor unions, and a high-yield bond fund for institutions. Delaware also started two real estate investment trust funds - one retail and one institutional - as joint ventures with Lincoln. The funds marry Delaware's ability to pick stocks with Lincoln's ability to value the underlying real estate, thanks to the insurer's broad real estate holdings, said Mr. Stork.
Advantages also could come from joining with its sister companies to develop new offerings, he said. Besides Delaware, Lincoln owns Lynch & Mayer Inc., a growth equity firm, and Vantage Global Advisors, a quantitative manager, both based in New York.
For example, Mr. Stork noted Lynch & Mayer has a large-capitalization growth strategy but no mutual funds, while Delaware has mutual funds, but none investing in large-cap growth equity.
The two firms haven't talked yet, said Mr. Stork, but he added it is "on our plate."
Delaware's product gaps include large-cap growth equity, technology funds, and growth and income funds - three of the top sellers in 1995, said Mr. Stork. While Delaware might not need to start its own large-cap growth fund, technology and growth and income products are appropriate, he said. Additionally, the firm also might start more fixed-income products. So far, Delaware has only U.S. tax-free and Pennsylvania tax-free bond funds, so state funds would be another logical area of development, said Mr. Stork.
Delaware's management also is working on a white paper on how to approach the high-net-worth individual market. Mr. Stork said he thinks Delaware will set up its wealthy individual effort on the institutional side as separately managed accounts, rather than as retail clients.
