CARMEL, Ind. - As incongruous as it might seem, executives at Conseco Capital Management Inc. say they feel they are running a $27 billion emerging firm.
Despite its size, CCM is only now getting name recognition in the pension area after more than a decade managing insurance assets.
Founded in 1981, the firm had been providing investment management services only to subsidiaries of its parent, insurance holding company Conseco Inc., until 1991. Since then, the firm has been seeking outside clients -mainly among other insurance companies - and developing a track record to attract pension funds and other institutions. It has managed to grow its outside asset base to $13.5 billion by the end of 1995 from $1.3 billion in 1990.
Conseco Capital has built its ratio of outside assets from approximately 25% of its assets under management two years ago - when Conseco Inc. gained notoriety with its failed bid for Kemper Corp. - to nearly half today, said Maxwell E. Bublitz, president of CCM. Eventually, Mr. Bublitz said he would like Conseco Inc.'s share to be reduced to about one-tenth of CCM's assets.
The company is trying to diversify its revenue streams by diversifying its clientele. It is building its institutional business, and started a private client group in December to court wealthy individuals.
Until now, the firm's institutional efforts had been hamstrung by the lack of an AIMR-compliant five-year track record, said Thomas A. Mayers, senior vice president and director of marketing. Other managers are familiar with CCM, but the firm just doesn't have the recognition in the pension community, he said.
The CCM fixed-income strategy reached the five-year milestone last June, and its equity strategy will reach it at the end of this year. With those numbers available, CCM is starting to show up on consultants' databases, and getting past their initial screens, said Mr. Meyers. The firm is taking advantage of the situation by stepping up its marketing among pension funds and consultants.
"We're starting to speak 'consultantese'*," said Mr. Bublitz.
CCM has brought in five new clients since November: a pension plan, a foundation, a university endowment, a hospital endowment and an insurance company, Mr. Bublitz noted. He would not disclose the names, because the contracts are still pending.
CCM's institutional clients include the Public Employees' Retirement Fund of Indiana, Indianapolis.
CCM offers equity, fixed-income and balanced separate accounts, as well as variable annuity products.
In equities, the firm uses a value-oriented bottom-up approach that is very research driven, said Mr. Bublitz. That approach sets it apart among value investors, where bottom-up strategies are not common, he said.