Skip to main content
MENU
Subscribe
  • Subscribe
  • Account
  • LOGIN
  • Topics
    • Alternatives
    • Consultants
    • Coronavirus
    • Courts
    • Defined Contribution
    • ESG
    • ETFs
    • Hedge Funds
    • Industry Voices
    • Investing
    • Money Management
    • Opinion
    • Partner Content
    • Pension Funds
    • Private Equity
    • Real Estate
    • Russia-Ukraine War
    • SECURE Act 2.0
    • Special Reports
    • White Papers
  • Rankings & Awards
    • 1,000 Largest Retirement Plans
    • Top-Performing Managers
    • Largest Money Managers
    • DC Money Managers
    • DC Record Keepers
    • Largest Hedge Fund Managers
    • World's Largest Retirement Funds
    • Best Places to Work in Money Management
    • Excellence & Innovation Awards
    • WPS Innovation Awards
    • Eddy Awards
  • ETFs
    • Latest ETF News
    • Fund Screener
    • Education Center
    • Equities
    • Fixed Income
    • Commodities
    • Actively Managed
    • Alternatives
    • ESG Rated
  • ESG
    • Latest ESG News
    • The Institutional Investor’s Guide to ESG Investing
    • ESG Sustainability - Gaining Momentum
    • Climate Change: The Inescapable Opportunity
    • Impact Investing
    • 2022 ESG Investing Conference
    • ESG Rated ETFs
  • Defined Contribution
    • Latest DC News
    • DC Money Manager Rankings
    • DC Record Keeper Rankings
    • Innovations in DC
    • Trends in DC: Focus on Retirement Income
    • 2022 Defined Contribution East Conference
    • 2022 DC Investment Lineup Conference
  • Searches & Hires
    • Latest Searches & Hires News
    • Searches & Hires Database
    • RFPs
  • Performance Data
    • P&I Research Center
    • Earnings Tracker
    • Endowment Returns Tracker
    • Corporate Pension Contribution Tracker
    • Pension Fund Returns Tracker
    • Pension Risk Transfer Database
    • Future of Investments Research Series
    • Charts & Infographics
    • Polls
  • Careers
  • Events
    • View All Conferences
    • View All Webinars
    • 2022 Retirement Income Conference
    • 2022 Managing Pension Risk & Liabilities
    • 2022 WorldPensionSummit
Breadcrumb
  1. Home
  2. Print
November 02, 1998 12:00 AM

STABLE-VALUE DEALS IMPROVE OUTLOOK: LAUGHLIN, FCM MAKE NEW AFFILIATIONS

Susan Barreto
  • Tweet
  • Share
  • Share
  • Email
  • More
    Reprints Print

    The issues of distribution and efficiency have forced some stable-value managers to reconsider their affiliations and in some cases make new ones.

    For the stable asset advisory and consulting unit of Laughlin Group of Cos., Beaverton, Ore., the time had come to tap into the "significant advantages in size," said William Gardner, managing director of Laughlin's stable-asset advisory unit. The firm was acquired last month by Burlington, Vt.-based Dwight Asset Management, a manager of stable-value funds.

    The merger brought the management of $15 billion in assets under one roof and will allow Mr. Gardner's firm to compete with larger firms, many of which have added stable-value management only as a side business.

    "Distribution is part of the issue, as are the economies of scale required now for stable-value managers to be a success," said David Richardson, managing director of Dwight.

    Dwight is expected to bring expertise in investment technology and additional resources to Laughlin, while Laughlin should add to the product lineup with its experience with bank-sponsored commingled funds, as well as its mainly West Coast clients, said John Dwight, Dwight president, in a statement.

    Laughlin had long felt the market had gotten sophisticated, Mr. Richardson said. Without the sale, Laughlin would have needed the resources to conduct research or would have had to hire subadvisory firms.

    After the acquisition is complete, about one-third of the stable-value portfolios will be outsourced, while the rest will be run internally, including traditional guaranteed investment contracts.

    The new consolidated firm should be a reality within the month, but the terms of the transaction were not disclosed.

    While the firms already had affiliations -- Dwight with United Asset Management and Laughlin with Allstate Life Insurance Co. -- both needed change to compete in the market place, according those involved.

    Others who are active in the stable-value industry, such as John J. Palmer, senior vice president at Cincinnati-based Ohio National Financial Services, have surmised that Allstate was basically interested in Laughlin's individual annuity business and chose to sell off the stable asset-related side.

    And Mr. Palmer has his own merger story to tell.

    The same week Dwight and Laughlin announced their merger, Ohio National Financial announced it was acquiring Woodbury, Conn.-based Fiduciary Capital Management.

    Ohio National really liked FCM's performance and believes both firms share opinions on the GIC industry, Mr. Palmer said.

    FCM will be allowed to continue to operate from its headquarters as an independently operating affiliate, officials at both companies said.

    The merger will help FCM gain resources for better distribution, said Peter Bowles, FCM president.

    The acquisition was no surprise to those in the industry or to Mr. Bowles, who had been contacted at least eight times by interested buyers by mid-year. Last year, he was solicited five times, he said, adding that all callers had "varying degrees of attractiveness."

    "I happen to think we are on the cusp of a significant growth phase in stable value,"he said.

    Mr. Bowles believes that the next five to eight years are going to favor stable-value investors and that interest will be piqued in aging baby boomers reading their asset allocations for retirement. Older people -- particularly individuals with higher balances -- may switch to stable value, thus boosting stable-value assets.

    FCM reached an agreement with Ohio National to sell 51% of its shares to the mutual insurance company. The deal closed last week. The deal was expected to close last week. Terms were not disclosed. The firms combined will have about $8.5 billion under management.

    Others in the stable-value industry point to other recent acquisitions such as INVESCO's purchase of PRIMCO as the success stories that lead other firms to follow in their footsteps.

    At Laughlin, Mr. Gardner is espousing a "small-shop attitude in a larger company" relationship.

    The question remains: Can the little fish retain some freedom in the stomach of the bigger fish?

    "Will we lose the boutique aspect? That's a good question," Laughlin's Mr. Gardner said.

    One stable-value manager, who asked that his name not be used, doesn't think it's possible for firms to remain autonomous, especially in the case of FCM.

    "Peter Bowles is an independent thinker in the industry . . . but it all depends on how hard he was pursued," he said, adding that it's impossible to keep independent thinking within a large institutional organization.

    Recommended for You
    Read the print edition of P&I
    Read the print edition of P&I
    How low is low? Projections say it's not low enough
    How low is low? Projections say it's not low enough
    FINRA honors Wharton's Olivia Mitchell with Ketchum Prize
    FINRA honors Wharton's Olivia Mitchell with Ketchum Prize
    Private Markets
    Sponsored Content: Private Markets

    Reader Poll

    July 29, 2022
    SEE MORE POLLS >
    Sponsored
    White Papers
    Gaining Momentum: Where Next for Trend-Following?
    The market opportunity in U.S. residential mortgage-backed securities
    Credit Indices Evolve with Enhanced Data Inputs
    Hedge Funds 2.0: Back to the future
    How Has 2022's Carnage Reshaped Global Stock and Bond Markets?
    Crossroads: Politics, Inflation, & Bonds
    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
    August 1, 2022 page one

    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.

    About Us

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

    Chicago Office
    130 E. Randolph St.
    Suite 3200
    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 © 1996-2022. Crain Communications, Inc. All Rights Reserved.
    • Topics
      • Alternatives
      • Consultants
      • Coronavirus
      • Courts
      • Defined Contribution
      • ESG
      • ETFs
      • Hedge Funds
      • Industry Voices
      • Investing
      • Money Management
      • Opinion
      • Partner Content
      • Pension Funds
      • Private Equity
      • Real Estate
      • Russia-Ukraine War
      • SECURE Act 2.0
      • Special Reports
      • White Papers
    • Rankings & Awards
      • 1,000 Largest Retirement Plans
      • Top-Performing Managers
      • Largest Money Managers
      • DC Money Managers
      • DC Record Keepers
      • Largest Hedge Fund Managers
      • World's Largest Retirement Funds
      • Best Places to Work in Money Management
      • Excellence & Innovation Awards
      • WPS Innovation Awards
      • Eddy Awards
    • ETFs
      • Latest ETF News
      • Fund Screener
      • Education Center
      • Equities
      • Fixed Income
      • Commodities
      • Actively Managed
      • Alternatives
      • ESG Rated
    • ESG
      • Latest ESG News
      • The Institutional Investor’s Guide to ESG Investing
      • ESG Sustainability - Gaining Momentum
      • Climate Change: The Inescapable Opportunity
      • Impact Investing
      • 2022 ESG Investing Conference
      • ESG Rated ETFs
    • Defined Contribution
      • Latest DC News
      • DC Money Manager Rankings
      • DC Record Keeper Rankings
      • Innovations in DC
      • Trends in DC: Focus on Retirement Income
      • 2022 Defined Contribution East Conference
      • 2022 DC Investment Lineup Conference
    • Searches & Hires
      • Latest Searches & Hires News
      • Searches & Hires Database
      • RFPs
    • Performance Data
      • P&I Research Center
      • Earnings Tracker
      • Endowment Returns Tracker
      • Corporate Pension Contribution Tracker
      • Pension Fund Returns Tracker
      • Pension Risk Transfer Database
      • Future of Investments Research Series
      • Charts & Infographics
      • Polls
    • Careers
    • Events
      • View All Conferences
      • View All Webinars
      • 2022 Retirement Income Conference
      • 2022 Managing Pension Risk & Liabilities
      • 2022 WorldPensionSummit