PHILADELPHIA — Delaware Investments is aggressively building its institutional equity management business and last week snagged its third team of veteran portfolio managers in the last 14 months.
The addition of a five-person international equity team is likely to end an overhaul of the Philadelphia-based firm's equity offerings. Delaware had $95 billion under management as of March 31, of which $24.2 billion was institutional.
In its latest deal, Delaware hired the international value managers that had formed Boston-based Arborway Capital earlier this year. The team, led by Zo%EB; Neale, launched Arborway after leaving Thomas Weisel Asset Management, San Francisco. A Delaware spokeswoman declined to say the amount of assets it acquired with the Arborway hiring.
The Arborway addition brings the total of new Delaware investment professionals to 15 since the firm lifted out Plainsboro, N.J.-based Merrill Lynch Investment Managers' large-cap value team in April 2004. The team, led by Tysen Nutt Jr., managed $7.5 billion in institutional large-cap assets for Merrill Lynch. In April, Delaware made another significant move to expand its equity team, lifting out a team of large-cap growth managers from Transamerica Investment Management, Los Angeles. This team, headed by Jeffrey Van Harte, managed $9.2 billion at Transamerica from San Francisco.
"We've had a history of doing liftouts, as well as internally developing our investment talent," said Patrick P. Coyne, managing director, who was appointed head of Delaware's equity investments in April 2004.
Mr. Coyne noted Delaware began bolstering its fixed-income operations by hiring a team of 25 from Conseco Capital Management Inc., Carmel, Ind., in July 2000, a deal that "took us to another level. That liftout included Jude Driscoll, then the head of fixed income at Conseco, who is now Delaware's president and chief executive officer. Delaware had $64.1 billion in fixed-income assets as of March 31.
Last year, Delaware officials decided that the firm's first move would be to address its needs for enhanced large cap-growth and large-cap value offerings, Mr. Coyne said. Both have since been satisfied through the Merrill and the Transamerica deals, he said. "We are pretty well set internally with our micro, small- and smid-cap products, but the one remaining piece has been international."
An international void developed in September, when the firm shed its 90-person international money management operation in a management buyout.
Delaware sold its London-based Delaware International Advisors Ltd. for $172 million to a group led by David Tilles, Delaware International's managing director and CIO. The unit, which managed about $19 billion in institutional international assets, now operates as Mondrian Investment Partners Ltd., London. It subadvises several Delaware international funds for retail and institutional investors.