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Boston Partners' retail effort adds a fifth fund


Boston Partners Asset Management Company, a spinoff of the former institutional money manager Boston Company, is slowly making inroads into the retail mutual fund industry.

Since its inception in mid-1995, Boston Partners has taken in more than $15 billion in assets to manage, mainly from institutions, pension and retirement accounts.

But last year, the company, founded by former money managers at Boston Company, started its first mutual fund to attract funds from high net worth individuals and small institutions. It has since added three new funds and, so far, attracted more than $200 million in mutual fund assets.

"We're thrilled with the results so far," said Michael Jones, chief operating officer of Boston Partners. "It's really a two-pronged approach to marketing mutual funds. We work with institutions and their pension funds and reach out to consultants and their prospective clients."

Last week, the company added a fifth fund -- the "Market Mutual Fund" -- which will buy stocks deemed to be undervalued and short sell stocks managers consider overvalued.

"The fund is asset neutral, beta neutral and will emphasize strong value," said Hank Lawlor, head of mutual fund marketing for Boston Partners.

Boston Partners will market the fund, as it does its other mutual funds, through its growing network of independent registered investment advisers. In the past two years, five marketing and sales employees for Boston Partners have been calling on intermediaries in hopes of enlisting them to sell the company's products.

The aim is to persuade the adviser community to think of Boston Partners' family of funds as a well-kept secret -- a "diamond in the rough" --- as Jones likes to say. To cultivate this image, Boston Partners has done very little advertising in the past year. It has run only a limited number of ads in trade publications. Instead, it has sent executives to national conventions of the investment adviser community and offered seminars to individual advisers to spread the word that Boston Partners' institutional investment strategy is now available at the retail level.

"We're offering something that their clients couldn't find on their own," said Lawlor. "Any investor can call Fidelity and buy a mutual fund, but we're offering advisers a way to prove their value to their investors."

"We've had financial planners pull us aside at a seminar and tell us that they're glad we don't advertise in The Wall Street Journal because they can have a direct relationship with us, rather than have their client contact us directly," says Jones. Eventually, Boston Partners will do limited national advertising, but direct selling to advisers will continue, says Jones. The image Boston Partners wants to project is that of a company focused on disciplined investing and one with roots in institutional money management. Boston Partners' founders -- 34 money managers of the former Boston Company -- ventured out on their own after unsuccessfully trying to buy Mellon Bank's institutional business. Currently, Boston Partners has about 96 employees, including 44 partners, says Jones.

"We offer long-term performance and stability," said Jones. "We emphasize equity ownership and we don't lose money managers because they're investors in our company."

Lawlor says Boston Partners wants to limit the assets in its mutual funds so that each fund can adhere to its investment guidelines. For example, its Mid-Cap Value Fund, started in mid-1997, will be limited to $2 billion in assets. So far there is $1.5 billion in separately-managed accounts, said Lawlor. On the retail side, which will be capped at $500 million, there is already $104 million under management.

The other three funds include the Large Cap Value Fund and Boston Partners Bond Fund, both started last year, and the Micro-Cap Fund, started in July, 1998.

"We don't want to be all things to all people," said Jones, "but we'll add funds as our relationships with the financial adviser community grow and we're made aware...of a need for a specific product."