OMAHA, Neb. - Mutual of Omaha Cos. hired Callan Associates Inc. to help design and develop a new series of proprietary mutual funds.
Mutual of Omaha will introduce a new bundled 401(k) plan program in the third quarter that will feature its own family of core asset class mutual funds, as well as a couple of dozen retail mutual funds. A series of risk-adjusted lifestyle funds also being offered will use the core proprietary funds as the investment vehicle.
Members of Callan's Chicago office will write the investment mandates for the fund family and hire separate account managers to manage various asset classes within core equity, international equity, fixed-income and money market manager-of-manager mutual funds, said Bud Wright, senior vice president and director of Mutual of Omaha's retirement plans division.
Callan also will select name-brand mutual funds to be offered within the bundled program, targeted at plans with 100 to 1,000 participants. Mr. Wright said managers of the proprietary funds and the mutual funds offered within its alliance will be chosen by July 1. Callan will be responsible for ongoing performance measurement and monitoring of all the funds offered, as well as continued management of the manager-of-manager stable for the insurer.
Mutual of Omaha also is in the finals stage of selecting a third-party administrator to provide daily valued record keeping, administration and client service for its new bundled program, said Mr. Wright. The company will select a record keeper before July 1.
Mr. Wright said Mutual of Omaha's has been diversifying out of health insurance for about five years, and the 401(k) effort is one of its primary aims. The company services about 500 small 401(k) plans now, mostly with fewer than 25 employees. Its own $160 million plan is administered in-house.
The new push to attract midsized plans will be primarily done through financial intermediaries: financial planners, brokers, employee benefits consultants and insurance agents. Gregory J. Allison was hired as a vice president and national sales director to head an expanded sales and client service force. The aim is to have a "high touch" level of client service, with dedicated service representatives in 20 Mutual of Omaha sales offices nationwide responsible for implementation, enrollment and employee education.
Wells Fargo rustles up funds
SAN FRANCISCO - Wells Fargo Bank N.A. will expand its mutual fund families this year to fill all asset class niches, said Mike Neidermeyer, executive vice president.
The first fruit of that expansion will be an internally managed active international equity fund managed by Kate Shapiro, who is currently managing international equity separate accounts. That fund will begin in August.
The company also might add a domestic large-capitalization value equity fund and a high-yield bond fund later in 1997, said Mr. Neidermeyer. Additional portfolio managers will be hired to manage the new funds and fill out existing staff.
The Overland Express family of 10 funds, with about $5 billion under management, is intended for institutional investors who use the funds through third-party brokers. The 16 existing StageCoach funds combine about $10 billion in retail assets and $5 billion for institutional investors sold through direct channels. The firm expects to double mutual fund assets in five years, but Mr. Neidermeyer said the company stands a good chance of hitting that goal within three years.
BOSTON - In his first move as president of Fidelity Management & Research Co., Robert C. Pozen expanded senior management by promoting Abigail B. Johnson, Robert A. Lawrence and Richard A. Spillane to associate directors and senior vice presidents of Fidelity's equity division.
The new management team will concentrate on the operational side of the business - such as systems, trading, recruitment, research and human resources - as well as general fund oversight to support the investment management process.
Ms. Johnson will oversee the activities of the growth and capital appreciation groups, which are headed by group leaders John McDowell and George Vanderheiden. She will remain group leader of the specialized growth group and will continue to manage equity information systems.
Mr. Lawrence will remain senior vice president of FMR Co. and head of Fidelity's high-in See Callan on page 25Continued from page 24
come division. He will become group leader of the asset allocation/income group and will oversee the structured and quantitative groups. He also will serve as liaison between portfolio managers and the equity trading group.
Mr. Spillane will become group leader of the income growth group and oversee the international group. He also will coordinate activity between portfolio managers and the equity research operations in Asia and the United Kingdom. Mr. Spillane most recently was chief investment officer for Fidelity in Europe; a Fidelity spokeswoman said his replacement will be named shortly.
Mr. Lawrence and Mr. Spillane replace Bart Grenier as group leaders of the asset allocation/income and income growth groups. Mr. Grenier left Fidelity to join DDJ Capital Management, Wellesley, Mass.
In a separate move, James C. Curvey was named chief operating officer. In the newly created position, Mr. Curvey will oversee day-to-day operations and directly manage several key corporate functions, including administration, finance and corporate affairs. He previously was president of Fidelity Capital, the business development division of the company, where he was replaced by Timothy T. Hilton, who was a managing director of the division.
Consulting firm formed
WEST HARTFORD, Conn. - A group of industry veterans formed Paradigm Partners International L.L.C., a consulting firm that will provide advice to financial services companies on product development and new alliances.
David R. Carpenter, retired chairman and chief executive officer of Transamerica Life Cos., Los Angeles, will be chairman, joined by managing directors Simon C. Baitler and James R. Johnston, both of the Stevenson Group, West Hartford, Conn., and Managing Director Norse N. Blazzard, former partner at Blazzard, Grodd & Hasenauer P.C., Fort Lauderdale, Fla., where he headed its consulting division. Also joining is Managing Director Robert W. Stone, former executive vice president of Dreyfus Retirement Services, New York.
Mr. Carpenter and Mr. Stone have had long experience within financial services companies, while Mr. Johnston and Mr. Baitler have been consulting for some years within a family of companies, and Mr. Blazzard is a specialist in variable annuity products.
A spokeswoman for Dreyfus said a search is underway to replace Mr. Stone, who left at the end of April.
PPI will have offices in West Hartford, Beverly Hills, Calif. and Fort Lauderdale.
New Fidelity unit
BOSTON - Fidelity Investments formed a new unit to focus more closely on the market for high-net-worth individuals.
Fidelity Asset Management and Trust Co., the new division, will combine discretionary asset allocation and personal trust for the first time under Lynn Davis, its new president. Ms. Davis was formerly executive vice president of Fidelity Investments premium client development group, which will be folded into the new company.
Separately, Martha B. Willis was named executive vice president of the retail mutual fund group, replacing Neil Litvak, who left in November. Ms. Willis was senior vice president of broker/dealer market management for Fidelity Investments Institutional Services Co.
Joan Blume was promoted to senior vice president of equity products in the retail mutual fund group. David Giunta was promoted to senior vice president of fixed-income and specialty products in the retail group, a new position.
SIA seeks flexibility
WASHINGTON - The Securities Industry Association wants regulators, mutual fund firms, broker-dealers and clearing houses to make it easier for investors to move their money between load mutual funds distributed by brokers and no-load mutual funds offered directly by mutual fund companies, said Stuart Kaswell, SIA general counsel.
An SIA survey of 70 companies in May shows 94% of securities firms want investors to be able to easily move their money between financial institutions. Securities firms surveyed also said no-load funds and proprietary or in-house mutual funds sold by a brokerage firm are the least portable.
LOS ANGELES - New USA Mutual Funds Inc. and MFS Series Trust II, sponsored by Massachusetts Financial Services Co., will merge the assets of the New USA Growth Fund into the MFS Emerging Growth Fund.
Shareholders of the New USA Growth Fund would receive Class A shares in MFS Emerging Growth Fund in the tax-free transaction. Shareholder approval for the deal will be sought May 28.
State Street Global Advisors, Boston, created a mutual fund site at http: www.SSgAfunds.com. The site provides investors with fund information, historical fund performance and monthly performance updates. Investors also can download and print directly fund prospectuses and applications.
T. Rowe Price Associates Inc., Baltimore, added a page to its Web site specifically for defined contribution plan participants. The "decisions" section at www.troweprice.com helps participants quantify retirement savings goals, educate themselves about investment basics, assess their own risk tolerance, review suggested asset allocation models and create customized portfolios.
The Web site now also allows mutual fund investors to conduct transactions on-line, including buying, selling and exchanging mutual fund shares. Account balances, current share prices and performance of all T. Rowe Price mutual funds are also available.
Putnam Investments, Boston, is phasing in new technology to serve financial advisers, mutual fund shareholders and defined contribution plan clients. The Putnam ServiceAdvantage program already provides CD-ROM technology to give financial advisers access to client statements. Advisers, fund shareholders and plan sponsors will have access to data for real-time account reporting via the Internet and intranet by the end of the year. Fund information will be added to the Web site address by the end of the second quarter. Customized home pages for defined contribution plans will be available in the second quarter, as will participant access to account balances and information via the Internet.
USAA Investment Management Co., San Antonio, Texas, launched USAA DIRECTInvesting, a software package that will allow investors to conduct transactions on the Internet. The software will give investors access to USAA's 33 mutual funds, mutual funds from outside managers and individual stocks and options offered through USAA Brokerage Services. Using DIRECTInvesting will give investors a 10% discount on fees for stock and option transactions.
Quote.com, an Internet financial information provider, added a new mutual fund center at its Web site, http: www.quote.com. The service provides free basic access to both Lipper Analytical Services Inc., New York, and Morningstar Inc., Chicago, fund performance and style analysis data. Users also can search for fund information and create customized portfolios. An application encourages 401(k) plan participants to evaluate mutual funds offered within their plans.
Scudder at supermarkets
BOSTON - Scudder, Stevens & Clark Inc., Boston, joined two more mutual fund supermarkets/alliances.
Forty-one no-load Scudder funds will be available in the Mutual Fund Connection program offered by Waterhouse Securities Inc., New York, bringing the number of funds offered in the program to more than 750 from 96 fund companies.
Thirty-seven of Scudder's no-load funds are available through three channels provided by Merrill Lynch's Private Client Group, Princeton, N.J.: the Merrill Lynch mutual fund adviser program, the asset power account and the financial advantage program. All three are available from Merrill Lynch's network of 14,000 financial consultants.
Schwab adds more families
SAN FRANCISCO - Two more mutual fund companies joined Charles Schwab & Co. Inc's Mutual Fund OneSource.
Five equity funds managed by the Marshall Funds, Milwaukee, will be available in the no-transaction-fee supermarket, including the Marshal Equity Income, Small Cap Stock, Stock, Mid Cap Stock and International Stock funds.
The Calamos Family of Funds, Naperville, Ill., will make three funds available through Schwab's institutional supermarket: The Calamos Convertible, Growth and Global Growth and Income funds.
Calamos also joined the supermarket offered through Fidelity Investment Advisor Group, Boston. Fidelity will distribute the Calamos Convertible, Growth, Global Growth and Income, Strategic Income and Growth and Income funds.
Orbitex hires CIO
NEW YORK - Courtney D. Smith closed Pinnacle Capital Management, New York, and joined Orbitex Management Inc., also of New York, as chief investment officer, a new position.
Mr. Smith will manage the Orbitex Growth Fund and its Communications and Info-Tech Fund. He also will be responsible for selecting subadvisers to manage new mutual funds for the largely retail fund vendor. Orbitex specializes in global niche market investing.
Orbitex has five funds in registration with the Securities and Exchange Commission; three will be managed in-house. Orbitex hired Impact Management, Hong Kong, to subadvise the Orbitex Asian High Yield Fund and State Street Global Advisors, Boston, to manage the Asian Select Advisor Fund, after SEC approval is granted.
Boston Partners Asset Management L.P., Boston, lowered the investment minimum to $2,500 on its Large Cap Value Fund in order to offer the fund through Boston-based Fidelity's FundsNetwork and Institutional FundsNetwork. The fund had been closed to investors with less than $5 million. Desmond Heathwood, chief investment officer, said the company was approached by many third-party intermediaries and individual investors seeking access to the company's mutual fund and that further distribution channels are being sought.
MFS Investment Management, Boston, named Christian A. Felipe manager of the new MFS Strategic Growth Fund. The fund will take large positions in companies Mr. Felipe believes have strong global franchises, significant free cash flow potential and proprietary positions in their respective markets.
The Security Benefit Group of Cos., Topeka, Kan., added the Security Value Fund managed by a team headed by Terry Milberger. Mr. Milberger also manages the Security Equity Fund. Day-to-day management of the fund is in the hands of Jim Schier. The fund's load will be waived for one year.
Fleming Capital Management, New York, has two funds in registration with the SEC. The Fleming Fund and the Fledgeling Fund are the company's first mutual funds for U.S. institutional investors and will mirror the management style of two Luxembourg-based equity funds. Each fund will invest in companies at the top of their industry and the best at generating growth in intrinsic value per share. The Fleming Fund invests in core domestic equities; the Fledgeling Fund invests in small cap stocks.
Parent Robert Fleming Holdings Ltd. is one of the world's largest managers. In the United States, Fleming Capital manages $2.5 billion in domestic equities, primarily for overseas investors.
Numeric Investors L.P., Cambridge, Mass., is preparing to close its n/i Growth Fund to new investors when its total assets reach $100 million; the fund now has about $80 million.
John H. Bogle Jr., director of portfolio management, said the decision to close the growth fund is consistent with the firm's policy of capping new cash flow at relatively low levels to better capture excess return. Numeric closed its small-cap growth separate account strategy to new investors in 1993 and its institutional hedged market neutral strategy in 1994.
Founders Asset Management Inc., Denver, appointed Robert Ammann as lead manager of the Founders Discovery Fund, replacing David Kern, who left to join Fremont Investment Advisers. Mr. Ammann has been managing the small-cap portion of the Discovery Fund and also was the co-portfolio manager of the Founders Special Fund, a position he now will pass to co-managers John Jares and Doug Loeffler.
Growth managers Seligman Financial Services Inc., New York, launched the Seligman Large-Cap Value Fund and the Small-Cap Value Fund. The funds are team managed led by Neil Eigen.
EQSF Advisers Inc., New York, introduced a second fund in its Third Avenue family of mutual funds - the Small-Cap Value Fund. The fund is managed by Martin J. Whitman and Curtis Jensen, who has been a research analyst for the fund family since 1995. The value investment strategy is similar to that used for its other fund, the Third Avenue Value Fund, emphasizing bottom-up stock selection of safe, cheap companies, without regard to market conditions. The small-cap fund invests in companies with market capitalizations of less than $1 billion.
Pioneer Funds Distributor Inc., Boston, founded the Pioneer Micro-Cap Fund, managed by William M. "Pete" Taussig. The fund will invest in the universe of about 7,000 companies with market capitalizations of less than $300 million that are traded on U.S. exchanges. The fund will close to new investors when it reaches $150 million. The fund generally will hold no more than a 2% position in any stock.
Vineeta Anand contributed to this column.