NEW YORK - Lynch & Mayer Inc., New York, is coming of age by seeking new markets and new strategies outside of its traditional U.S. institutional base.
The firm, entering its 21st year, recently stepped into the mutual fund arena through subadvisory assignments for its parent, insurance holding company Lincoln National Corp., Fort Wayne, Ind. Now, it expects to venture even further, looking into into overseas markets, either on its own or with help from its parent or its newest sister company, Delaware Management Holdings, which Lincoln acquired last year.
While Lynch & Mayer remains focused on institutional business, it plans to expand its reach to retail markets to grow its $6 billion in total assets, said W. Denman Zirkle, senior vice president in charge of marketing and client relations. The firm is focusing now on subadvisory agreements for mutual funds and annuities, as well as hedge funds and looking overseas for markets that will be receptive to its investment style.
Lynch & Mayer had concentrated mainly in managing large-capital growth equity for institutional accounts until the 1990s, when it ventured into new areas by adding new strategies and new vehicles such as hedge funds. The firm, which was founded in 1976, only began offering its third product in 1992, when it introduced its midcap growth equity portfolio; before that, it had managed a convertible bond fund for Lincoln since 1987.
These days, Lynch & Mayer manages equities and convertible securities as separate accounts, commingled funds, hedge funds and mutual funds. It introduced combined large- and midcap equity portfolios in 1993 and wants to bring out a small-cap vehicle next year, said Mr. Zirkle.
Among its newer retail-oriented offerings, Lynch & Mayer now subadvises two growth equity funds in Delaware's retail family, and added two specialized funds to its hedge fund line, RetailVantage partners, a fund launched in July to invest in retailers' equity; and TechVantage Partners L.P., a fund opened last year that invests in technology-based companies.
Lynch & Mayer has approximately $6 billion in assets, a sharp contrast to less than $1 billion when Lincoln acquired it in 1985. The firm is developing a five-year plan to address growth, said Mr. Zirkle. It has targeted a 10% annual rate of asset growth, and the strategic plan will focus on how the retail and international concentration will affect that rate of growth, he said.
The firm hired the consulting firm Sasdi & Associates, London, to help it develop a strategy to approach one or more overseas partners, and its recommendations were expected at the end of November. The consultant is sorting through countries to pick out which firms could be the main targets for Lynch & Mayer and what strategies would work for approaching them.
If the moves seem to be proceeding slowly, it's because Lynch & Mayer takes a long time to move in any one direction, focusing on measured growth to avoid mishaps, said Mr. Zirkle.
"We're not the kind of group to hire 12 people and say 'we're going to do retail' and everybody runs out yelling 'Retail!'*" he said.
The firm's founders, Chairman Dennis Lynch and Vice Chairman Eldon Mayer, are still with the firm, but succession plans are in place. Edward Petner, now president and co-chief executive officer with Mr. Lynch, is the heir apparent. Mr. Petner joined Lynch & Mayer in 1983 from The Wharton School and worked his way up the ranks. Additionally, there are executives in supporting positions who have been with the firm for more than 10 years and are being positioned to take over as top management retires.
Such staying power is not unusual at Lynch & Mayer, said Mr. Zirkle. He noted the firm put phantom equity incentives in place to help in retaining staff after the acquisition by Lincoln.