When they put their minds to it, even hard-core mutual fund managers can become institutional investment management success stories virtually overnight.
When Davis Selected Advisors LP, New York, decided 18 months ago to take a serious stab at the institutional separate account market, company officials didn't mess around.
Davis, which currently manages about $18 billion in its mutual fund family, then managed $2.1 billion in separate accounts for institutional clients, about $1.9 billion of which came from insurance companies.
But it was pension fund, endowment and foundation money the company sought, said Russell Wiese, chief marketing manager. Mr. Wiese aggressively beefed up the institutional marketing unit, naming Peter Sackman institutional marketing manager.
The efforts to sell the company's conservative, value equity investment strategy to institutional investors probably was helped by its 50-year track record and the fact that $1.5 billion of the Davis' family money is invested in the mutual fund family.
The core equity strategy -- buying growth companies at value prices and holding them a long time -- outperformed the Standard & Poor's 500 index in every year during the past 10 years, said Mr. Wiese.
Institutional investors and their consultants appear to have been convinced. About $300 million in institutional assets was brought into separate account management in the past 18 months, with about $150 million coming in the third quarter alone.
Mr. Wiese said the firm is seeking "quality relationships, rather than growth for the sake of growth." Some of the new clients on the institutional side are Volvo Cars of North America Inc., Baltimore Gas & Electric Co. and Southwest Airlines Co.
