ATLANTA - INVESCO has launched a series of commingled funds designed to expand its share of the foundations and endowments market.
James White, managing director of sales at Atlanta-based INVESCO, a division of AMVESCAP PLC, said the offerings will be targeted specifically to the smaller end of the market, funds with less than $100 million in assets.
The three new funds include a structured core equity fund, which is benchmarked to the Standard & Poor's 500 stock index; a core fixed-income fund, benchmarked to the Lehman Brothers Aggregate Bond index; and a core international equity fund, benchmarked to the Morgan Stanley Capital International Europe Australasia Far East index. All three already are offered to larger foundations and endowments.
INVESCO also offers a private equity fund of funds to the small foundations and endowments market. Soon, INVESCO plans to offer a market-neutral cash strategy to this market, Mr. White said.
He said the firm has had to turn away business because it didn't have the right investment vehicles to offer. "We've actually had to recommend people to competitors. ... We think the timing is right to provide complementary products to some of the alternatives that exist today."
INVESCO managed $7.4 billion in assets for foundations and endowments as of Dec. 31, said William Hensel, INVESCO spokesman.
Mr. White said the idea was to take existing INVESCO separate accounts run by the same portfolio managers and create a commingled structure, making the investments accessible to small foundations and endowments. The new commingled funds became available to these plans starting Feb. 1.
Mr. White said the smaller foundations and endowments are increased pressure from plan participants to emulate the strong investment returns that larger plans have posted. These product offerings will allow smaller investors to feel comfortable that they're getting the same investment brain power - and results - as larger investors.
He said the smaller foundations and endowments, which traditionally have used local banks and brokerage firms to manage assets, are starting to find there is a range of money managers available to them. The market place is beginning to realize that "the same people that are servicing Fortune 50 companies will be able to manage my endowment."
From INVESCO's perspective, said Mr. White, "We're looking at the market segment and saying we know big endowments like these products; how can we efficiently deliver them to a smaller plan?"
INVESCO is launching these products as part of a larger effort to gain assets in the foundation and endowment marketplace by broadening its scope. The firm already offers its full range of institutional investments to the larger end of the foundations and endowments market.
Mr. White believes his firm is well positioned to attract more assets in 2001 by going after the broader market with an array of investment options.