JENNISON SEEKS GROWTH IN MUTUAL FUND ARENA
Skip to main content
pilogo-NEW
Subscribe
  • Subscribe
  • My Account
  • login
  • NEWS
    • Asset owners and the coronavirus
    • Alternatives
    • Consultants
    • Coronavirus
    • Defined Contribution
    • ESG
    • Frontlines
    • Hedge Funds
    • Investing / Portfolio Strategies
    • Money Management
    • Pension Funds
    • People Moves
    • Private Equity
    • Real Estate
    • Searches & Hires News
    • SECURE Act
    • Special Reports
    • WorldPensionSummit
    • Ron Schmitz
      Pandemic drives faster transition for Virginia to private markets
      Mubadala Investment Co. logo
      Mubadala draws on portfolio in coronavirus fight
      T.J. Carlson
      Texas Muni reduces downside risk during pandemic, finding opportunities now
      Scott Davis
      ‘Triage plan’ at Indiana system helped stem losses
    • BEX Capital brings on head of origination
      Varagon Capital fills new business development role
      Fitch Group in deal to acquire CreditSights
      Credit managers’ outlook still gloomy but brightening – survey
    • Will Martindale
      Cardano Group chooses group head of sustainability
      Meketa hires first chief marketing officer
      Nick Horsfall
      Redington names managing directors for investment consulting team
      Marsh & McLennan Agency sets sights on Compass Financial
    • Yellen calls for more COVID relief, retirement access
      A healthcare worker provides care for a COVID-19 patient in the intensive care unit at the Saint Joseph hospital in Marseille, France, on Nov. 20, 2020.
      World must act to strengthen against future pandemics – report
      New York State Common challenges Tyson’s dual-share stock structure
      Credit managers’ outlook still gloomy but brightening – survey
    • Fidelity cuts target-date asset threshold for lower fees
      DCIIA looks to spark engagement with plan sponsor institute
      Ascensus, Empower acquire Truist record-keeping business
      PCS Retirement acquires Alliance Benefit Group-Rocky Mountain
    • LaSalle Investment Management taps 2 for new ESG roles
      Sovereign credit ratings vulnerable to ESG risks — Moody’s
      JPMAM names head of investment stewardship, Asia ex-Japan
      New law requires MassPRIM to increase diversity of managers, consultants
    • Galina Churkina
      Building research earns honor from Aquila Capital
      Blackstone holiday video
      Blackstone would like to show you how things are done around the office
      MacArthur Foundation invests in women’s safe housing fund
      Bill Harmon
      Voya offers fee break for minority-owned firms
    • Shanghai skyline
      Global hedge funds struggle even in a more open China market
      The Sun Hung Kai Properties Ltd. logo is displayed on the Sun Hung Kai Centre building in Hong Kong on Sept. 13, 2018
      SHK spins out East Point Asset Management
      Man holding a business card with Hedge Fund written on it
      Hedge funds chalk up decade’s best returns in 2020 – HFR
      New hedge fund launches surpass liquidations in third quarter
    • Dodge & Cox sets succession plan for key executives
      Labor Department names new ERISA Advisory Council members
      CalPERS records 12.4% return in 2020
      Fidelity cuts target-date asset threshold for lower fees
    • Dodge & Cox sets succession plan for key executives
      Onex Partners adds head of portfolio operations
      Fidelity International launches private credit capability with team liftout
      A sign on the exterior of a Northern Trust Corp. branch in Chicago on July 13, 2017
      Northern Trust to cut 500 jobs
    • CalPERS records 12.4% return in 2020
      Maine Public Employees boosts target to alternative credit
      Los Angeles City Deferred Comp narrows list to 2 in manager search
      Connecticut pension fund CIO resigns
    • Dodge & Cox sets succession plan for key executives
      BEX Capital brings on head of origination
      LaSalle Investment Management taps 2 for new ESG roles
      Onex Partners adds head of portfolio operations
    • Pension funds continue private equity investing spree
      Big jump in private equity AUM expected over next 5 years
      Thoma Bravo takes in $22.8 billion for 3 funds
      Jason Thomas
      Data, technology become new prized possessions
    • Chiang Ling Ng
      Hines hires first head of Asia-Pacific real estate investments
      Brand new apartment building on sunny day in spring with blooming trees
      Real estate returns forecast to trend lower – report
      Ivanhoe Cambridge Inc. signage is displayed outside the company's office near Bay Street in Toronto on Aug. 29, 2011
      Ivanhoe Cambridge, PAG announce joint venture for Japan logistics investments
      Residential buildings in Hong Kong on Feb. 20, 2020
      KKR closes first Asia-Pacific real estate fund at $1.7 billion
    • Retirement cartoon
      Hopes rising for retirement readiness in 2021
      Neal and Brady
      Retirement security could be only issue both sides accept
      David Ireland
      Sponsors returning to questions about in-plan annuities
      Shawn O'Brien
      Annuities coming to target-date funds, but not right away
    • Outlook 2021
      The top 10 stories of 2020
      The best places to work in money management
      Investment consultants
    • U.S. still a key market for investors
      Collected coverage of P&I's 2020 WorldPensionSummit
      Pedestrians pass a large advertisement on the Arndale Center shopping mall reading 'Act now to avoid a local lockdown' in Manchester, England
      COVID-19 puts new opportunities and risks on the agenda - WPS panelists
      Screens display stock price information over the trading floor of the NYSE Euronext exchange in Paris
      Private assets will continue to grow in portfolios – WPS panelists
  • Data
    • Research Center
    • Searches & Hires Database
    • Searches & Hires News
    • RFPs
    • Charts / Infographics
    • Sponsored Research
    • Trackers
    • Q2 2020 searches and hires overview report
      Q2 2020 money manager M&A activity summary
      Q2 2020 legal overview report
      Q1 2020 searches and hires overview report
    • Southeastern Pennsylvania Transportation seeks actuary for DB, DC plans
      Pennsylvania Public School Employees assigns $100 million to venture capital fund
      University of Washington looking for investment consultant
      Sacramento County Employees invests $40 million in Aristeia hedge fund
    • Southeastern Pennsylvania Transportation seeks actuary for DB, DC plans
      Pennsylvania Public School Employees assigns $100 million to venture capital fund
      University of Washington looking for investment consultant
      Sacramento County Employees invests $40 million in Aristeia hedge fund
    • International Small Cap Manager Services
      Financial Expertise
      Passive Index Manager Services
      Emerging Markets Equity Investment Management Services
    • U.S. fixed-income returns post another positive year
      Nasdaq delivers an impressive year
      U.S. dollar's recent decline continues
      Hedge funds warming up to financial sector, remain long U.S. equities
    • Institutional Investors: Shared Expectations, Divergent Paths
      Global Investor Study 2016
      Workplace Financial Wellness
    • U.S. Endowment Returns Tracker
      Pension Fund Returns Tracker
      Earnings Tracker
      Corporate Pension Contribution Tracker
  • Insights
    • Opinion
    • White Papers
    • Industry Voices
    • Letters to the Editor
    • Partner Content
    • Publisher's Update
    • Retirement cartoon
      Hopes rising for retirement readiness in 2021
      view gallery
      25 photos
      Cartoons depict a year like no other
      view gallery
      25 photos
      2020 in editorial Cartoons
      Consultants cartoon
      Seeking an investment consultant? Caveat emptor
    • Climate change and emerging markets after Covid-19
      An Asset Owner's Guide to Multi-Manager Portfolio Management
      Research for Institutional Money Management
      The Future of the U.S. Dollar - Dominant currency or one of many?
    • Michael McNally
      Commentary: New ‘investment-plus’ test poses risks to private equity investors
      Adam Waterous
      Commentary: Institutions urged to act now on opportunities created by current global oil disruption
      Ron Lagnado
      Commentary: Straw man critiques don’t hold up in face of real world success
      Robert Raben
      Commentary: What the asset management industry must do to bolster diversity
    • Writer using a typewriter
      OCIO industry needs to adopt GIPS
      Writer or journalist workplace. stock illustration
      Even as it assails China, Trump administration emulates it
      Skeptical of Main Street support for proxy adviser proposal
      Focus on manager diversity pushes asset owners’ to walk the talk
    • Sponsored Content By iShares
      ETFs are becoming a cornerstone of insurance equity portfolios
      Sponsored Content By Aberdeen Standard Investments
      Taking a passive approach to the hedge-fund universe
      Sponsored Content By World Gold Council
      Gold: the most effective commodity investment
      Sponsored Content By iShares
      For institutional investors, ETFs can make meeting liquidity needs easier
    • Help us help you by supporting quality journalism
      You Must Believe in Spring
      Everything Must Change
      Tomatoes & Investments
  • Multimedia
    • Videos
    • Webinars
    • Polls
    • Slideshows
    • Charts / Infographics
    • watch video
      1:24
      U.S. stocks were 2020’s comeback kid
      watch video
      1:23
      Outlook 2021
      watch video
      1:52
      Buy gold's pullback?
      Coronavirus and the S&P 500: 2020
    • Getting Back to Normal: How to Creatively Manage Fixed Income Portfolios in a Rising Rate Environment
      What might a Biden DOL and SEC mean for retirement plans?
      Staying on target with target-date funds
      The Institutionalization of Retail Part Two: A Webinar Series from P&I Content Solutions and Chestnut Advisory Group
    • POLL: Retirement issues in 2021
      POLL: Money managers' priority in Asia-Pacific region
      POLL: Retirement issues in the presidential election
      POLL: The S&P 500 in the third quarter
    • view gallery
      9 photos
      Coronavirus and the markets
      view gallery
      22 photos
      The 1,000 largest retirement funds: 2020
      view gallery
      10 photos
      Outlook 2020
      view gallery
      10 photos
      2019 as seen through the eyes of Roger
    • Graphic: U.S. stocks were 2020's comeback kid
      U.S. fixed-income returns post another positive year
      By the Numbers
  • Events
    • Conferences
    • Webinars
    • Defined Contribution Spring Virtual Series
      DC Investment Lineup Virtual Series
      ESG Investing Virtual Series
      Private Markets Virtual Series
    • Getting Back to Normal: How to Creatively Manage Fixed Income Portfolios in a Rising Rate Environment
      What might a Biden DOL and SEC mean for retirement plans?
      Staying on target with target-date funds
      The Institutionalization of Retail Part Two: A Webinar Series from P&I Content Solutions and Chestnut Advisory Group
  • Careers
  • Research Center
MENU
Breadcrumb
  1. Home
  2. Print
January 06, 1997 12:00 AM

JENNISON SEEKS GROWTH IN MUTUAL FUND ARENA

Christine Williamson
  • Tweet
  • Share
  • Share
  • Email
  • More
    Reprints Print

    NEW YORK - The well-known institutional money manager, Jennison Associates Capital Corp., quietly has been becoming a mutual fund manager.

    Since May 1990, when Jennison won its first subadvisory appointment from Harbor Capital Advisors Inc., Toledo, Ohio, mutual fund assets under management have swelled to about $3 billion in eight mutual funds.

    The growth is fairly impressive for a company that doesn't have a marketing department, doesn't advertise and doesn't have a name well known in American households.

    New developments at its parent company, the Prudential Insurance Co. of America Inc., Newark, N.J., might significantly pump up the amount of assets Jennison manages for both mutual and commingled funds next year.

    Additionally, one of the funds Jennison manages for Caterpillar Investment Management Ltd., Peoria, Ill. - the $397 million Preferred Group Growth Fund - will reach the magic five-year mark in June, which will bring it more attention from investment management consultants and financial planners. Lulu Wang is the fund's manager.

    "Magical things start happening when a mutual fund finally gets a five-year track record. You finally start making the cut into consultant databases and you begin to see the assets really grow," said P. Michael Pond, who recently resigned as president of Caterpillar Investment Management.

    Jennison is a significant player in the institutional market, with $30 billion under management overall as of Sept. 30. About $20 billion of that was from institutional investors.

    Unlike many institutional money managers, which set up mutual fund families of their own or are thinking about it now, Jennison principals decided to take a different route. Back in the mid-1980s, Jennison principals took note of the corporate shift to defined contribution plans and saw that it would be necessary to add the capability to manage defined contribution plan assets, said John H. Hobbs, chairman and chief executive officer.

    "At that time, we saw that we couldn't manage defined contribution assets without mutual funds. At this point, we had three choices. We could have then become a financial services company in order to service mutual fund shareholders. We could have gone public to raise capital. Or we could do what we did - sell out in 1985 to a much larger financial services company, Prudential, which would provide the infrastructure and administration that would leave us free to do what we do best, manage money. Prudential packages up our money management, leaving us free to manage money," Mr. Hobbs said.

    Harbor Capital Advisors, the investment management subsidiary of Owens-Illinois Inc., decided in 1990 to create its own mutual funds using managers from its defined benefit plan stable. Jennison was one of the first managers to be hired, for the Harbor Capital Appreciation Fund, a large-capitalization equity fund with $1.5 billion as of Sept. 30. Later, Harbor hired Jennison for a second fund, the $436 million Harbor International Growth Fund, managed by Howard Moss and Blair Boyer.

    Harbor is able to offer its mutual funds at an advantageous fee because it was able to average the fees paid to Jennison for investment management of the Owens-Illinois defined benefit plan portfolio and the mutual fund. Because the investment style for the mutual fund and the separate account is the same, the average front-end fee is just 0.75 basis points, said Spiros Segalas, president and chief investment officer of Jennison and the portfolio manager of the Harbor Capital Appreciation Fund.

    Mr. Segalas said there isn't a great difference to him in managing a mutual fund and any other pension fund separate account.

    "There are some differences in the perception of relative performance that I do find interesting, however. If we reach a 25% return in a year and the market returned 35%, a pension fund will have us out on the floor, demanding to know why we underperformed. But our mutual fund shareholders seem to be pretty pleased with a 25% return. To them, performance is taken in the absolute, not the relative sense. And it does amuse me when I visit institutional clients to talk about the performance of their separate accounts only to have them ask me about the perfromance of (the) Capital Appreciation (fund)," he said.

    Caterpillar Investment Management established its Preferred Group Growth Fund in 1992, and the Preferred Group Balanced Fund last year, which had about $43 million under management as of Sept. 30. Brad Goldberg is the lead manager of the investment team of the Caterpillar balanced fund.

    Both Owens-Illinois and Caterpillar offer the mutual funds of their investment management subsidiaries to employees in their own defined contribution plans, ensuring a steady internal cash stream.

    To further its reach into mutual fund management, Jennison broke the mold when it went to its parent and suggested Prudential needed Jennison-managed mutual funds. Generally, large financial services companies tend to buy investment management boutiques with the idea of using them to provide mutual fund management.

    But Mr. Hobbs said Prudential had not really thought about Jennison mutual funds until the subsidiary brought it up with the parent company's management.

    The $695 million Pru-Jennison Growth Fund was established about a year ago, managed by David Poisez, and the Pru-Jennison Growth & Income Fund was established in October. Mr. Goldberg is the lead manager of the G&I fund, as well as the $154 million Prudential Institutional Active Balanced Fund.

    Mr. Poiesz also manages the Pru-Jennison Series fund, with $184 million, which is used only by annuity programs.

    Both Mr. Segalas and Mr. Hobbs see Prudential as Jennison's main source of defined contribution plan and retail investments.

    "Prudential is a powerhouse. We really expect that they will push these funds through to waiting investors, particularly since its network of agents is so wide. Jennison probably won't become a household name, but Prudential may very well pull it off on the 401(k) plan side," Mr. Hobbs said.

    In further pursuit of institutional assets, Prudential is working on a series of commingled funds, using Jennison and some of its other managers to provide a more cost-effective investment vehicle for both defined benefit and defined contribution plans, said Mr. Hobbs, who also is the president of Prudential Asset Management. Details are sketchy, but Mr. Hobbs anticipates commingled pools would be available early next year that will allow smaller pension plans of both types access to high-quality institutional investment management.

    "Providing commingled trusts is yet another evolution for Jennison and Prudential. Our strategy all along has been all about providing the best performing investment management to institutional clients in the form they want it. Jennison was early in the game providing defined benefit plan investment management as a boutique. It expanded into mutual fund management which helped DC plans gain access to our management. Commingled funds are the next phase, providing a cost-effective vehicle for investment management. They are very cost competitive compared to mutual funds and can now be daily valued for defined contribution plans. They will have a lower minimimum floor than is typical, so smaller DB and DC plans can have access to it, too," he said.

    Recommended for You
    Read the print edition of P&I
    Read the print edition of P&I
    Targeting millennials: Author, niece put his latest book to music
    Targeting millennials: Author, niece put his latest book to music
    How low is low? Projections say it's not low enough
    How low is low? Projections say it's not low enough
    Research for Institutional Money Management
    Sponsored Content: Research for Institutional Money Management
    sponsored
    Events
     
     
    Sponsored
    White Papers
    Climate change and emerging markets after Covid-19
    An Asset Owner's Guide to Multi-Manager Portfolio Management
    Research for Institutional Money Management
    Bond ETFs show maturity during Covid market mayhem
    Global gold-backed ETFs: A popular gateway to the gold market
    The Future of the U.S. Dollar - Dominant currency or one of many?
    View More
    Sponsored Content
    Partner Content
    The Industrialization of ESG Investment
    For institutional investors, ETFs can make meeting liquidity needs easier
    Gold: the most effective commodity investment
    2021 Investment Outlook | Investing Beyond the Pandemic: A Reset for Portfolios
    Ten ways retirement plan professionals add value to plan sponsors
    Gold: an efficient hedge
    View More
    E-MAIL NEWSLETTERS

    Sign up and get the best of News delivered straight to your email inbox, free of charge. Choose your news – we will deliver.

    Subscribe Today

    Get access to the news, research and analysis of events affecting the retirement and institutional money management businesses from a worldwide network of reporters and editors.

    Subscribe
    Connect With Us
    • RSS
    • Twitter
    • Facebook
    • LinkedIn

    Our Mission

    To consistently deliver news, research and analysis to the executives who manage the flow of funds in the institutional investment market.

    pilogo-NEW
    About Us

    Main Office
    685 Third Avenue
    Tenth Floor
    New York, NY 10017-4036

    Chicago Office
    150 N. Michigan Ave.
    Chicago, IL 60601

    Contact Us

    Careers at Crain

    About Pensions & Investments

     

    Advertising
    • Media Kit
    • P&I Content Solutions
    • P&I Careers | Post a Job
    • Reprints & Permissions
    Resources
    • Subscribe
    • Newsletters
    • FAQ
    • P&I Research Center
    • Site map
    • Staff Directory
    Legal
    • Privacy Policy
    • Terms and Conditions
    • Privacy Request
    Pensions & Investments
    Copyright © 1996-2021. Crain Communications, Inc. All Rights Reserved.
    • NEWS
      • Asset owners and the coronavirus
      • Alternatives
      • Consultants
      • Coronavirus
      • Defined Contribution
      • ESG
      • Frontlines
      • Hedge Funds
      • Investing / Portfolio Strategies
      • Money Management
      • Pension Funds
      • People Moves
      • Private Equity
      • Real Estate
      • Searches & Hires News
      • SECURE Act
      • Special Reports
      • WorldPensionSummit
    • Data
      • Research Center
      • Searches & Hires Database
      • Searches & Hires News
      • RFPs
      • Charts / Infographics
      • Sponsored Research
      • Trackers
    • Insights
      • Opinion
      • White Papers
      • Industry Voices
      • Letters to the Editor
      • Partner Content
      • Publisher's Update
    • Multimedia
      • Videos
      • Webinars
      • Polls
      • Slideshows
      • Charts / Infographics
    • Events
      • Conferences
      • Webinars
    • Careers
    • Research Center