NEW YORK — Bear Stearns Asset Management is setting its sights on significant institutional growth, but it's doing so quietly.
Michael E. Guarasci Sr., senior managing director and head of the firm's institutional business, said New York-based BSAM has been undergoing a "metamorphosis" since Richard A. Marin became chairman and chief executive officer more than two years ago.
The firm has been steadily refining its product offerings since then, with an eye on developing higher revenue-generating institutional strategies — such as alternative investment and hedge fund products — that will increase the unit's long-term profitability.
Since initiating the early stages of its growth plan in late 2003, Bear Stearns has increased both its assets and revenue significantly.
Assets under management increased more than 20% to $32.5 billion as of June 30, most from institutional investors, from $27.1 billion at the end of November 2003.
The asset mix is 48% fixed income, 40% equities, 8.6% hedge funds and 3.4% private equity.
BSAM is responsible for between 1% and 2% of parent Bear Stearns Cos. Inc.'s profits. The goal is to build a business that could eventually produce up to 10% of profits.
"We have a very definite, and very analytical plan in place to grow the business," said Mr. Guarasci. "One of our main focuses is driving revenue and profitability, but we also need to make sure that we are measuring our business properly … We want the right teams in the right products in the right channels," he added. "Consistency is a key."