DES MOINES, Iowa -- Invista Capital Management intended to hire one really good large-cap growth manager to fill a single slot in its Des Moines-based equity group. Instead, it lifted out an entire team.
Mary Sunderland, a portfolio manager at Skandia Asset Management Inc., New York, was Invista's top candidate for the vacant job.
But when it became clear that she had a strong support team of equity strategists at Skandia -- Michael Gelsomino, Frank Cioffi and Mark DaSilva -- Invista officials realized "we had a higher probability of re-creating the great performance they've had if we brought the whole team with her," said Craig R. Barnes, president.
Ms. Sunderland's team managed $3 billion in U.S. large-cap growth equities for Skandia Asset Management's parent company, Skandia Insurance Co. Ltd., Stockholm.
Mr. Barnes said he had been thinking about opening an office for Invista in the Northeast for some time and was "just waiting for a catalyst."
The Skandia team is working on transition issues in Des Moines, but will be based in New York. And while Invista isn't planning to move any members of its existing team to New York, the new office might help in attracting talented and experienced managers in the future, Mr. Barnes said.
Skandia Asset Management, meanwhile, is in "maintenance mode" as Chief Investment Officer Stefan Carlsson searches for a new equity team, said Janet Early, chief financial officer.
Replacements might be in place within a month, Ms. Early said. Niklas Lundin will arrive in New York this week from Stockholm to assume interim management of the U.S. equity assets, with assistance from Filip Boman, one of the growth team's members who is based in Stockholm.
Skandia Asset Management is just beginning to market its investment management services to clients in the United States and so far has one U.S. insurance company client and an agreement to manage money for high-net-worth individuals through a large U.S. accounting firm, said Ms. Early. She wouldn't identify the firms. Most of Skandia Asset Management's $3 billion under management is the U.S. portion of the parent company's general account investments.
"We view this team leaving as a minor setback. It's happening at a time when it is appropriate to make a changeover to a new team, before we've really begun to manage assets for outside clients," she said.
At Invista, the New York-based large-cap growth team will assume management of $1.4 billion in three vehicles: the Principal Growth Fund, a mutual fund; a variable annuity clone of the mutual fund; and a large-cap growth commingled fund for the defined contribution plan clients of Invista's parent company, The Principal Financial Group, also of Des Moines.
Ms. Sunderland's team also will manage institutional separate accounts as part of Invista's push into the qualified plan and endowment and foundation markets, Mr. Barnes explained.
Less than 10% of the $32 billion Invista manages is from institutional clients, and much of that is in international core, emerging markets and international small-cap strategies. Invista hopes the strong track record Ms. Sunderland racked up in domestic large-cap growth stocks while at Skandia will attract institutional investors. The Skandia team's composite track record over the one-, three- and five-year periods ended Sept. 30 ranked in the top quartile among large-cap growth managers in the Pensions & Investments' Performance Evaluation Report.
The Invista managers in Des Moines who were running the large-cap growth equity funds will move to small-cap and midcap management, which will continue to be run from Iowa, Mr. Barnes said.
Ms. Sunderland's growth equity strategy is similar to Invista's -- fundamental, emphasizing high-quality companies with high levels of earnings growth. Her portfolios have been more concentrated, as she is more willing to put a higher weighting into individual securities and to hold a stock a little longer than Invista's managers.