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Pioneer Taps Former Fidelity Wealth Whiz for CEO Spot

A little less than a year after being acquired by UniCredito, Pioneer Investment Management named Daniel Geraci CEO, replacing David Tripple, who stepped down at the end of September. As CEO of Pioneer, Geraci, formerly the president of Fidelity Investments' private wealth division, will be responsible for leveraging the wealth management products and services of its Milan-based parent company, Unicredito.

Mutual Fund Market News' Andrew Greene caught up with Geraci shortly after he was named CEO to discuss his plans for Pioneer. An edited version of their conversation follows.

MFMN: Congratulations on being named CEO of Pioneer.

Geraci: I think it's a tremendous opportunity. It's a great firm with a great history and more people need to know the story.

MFMN: It seems like UniCredito's acquisition of Pioneer may have breathed some new life into the firm.

Geraci: Well, absolutely. What was most attractive for me was the position the parent is taking. UniCredito has put a huge commitment on the table with the acquisition, they invested a tremendous amount in the business after they bought it and they have resources that really need to be tapped to their fullest to help leverage the business here. And at the same time they're also a great partner because they recognize that the U.S. business needs to run in a way that's appropriate for this market using a competitive U.S. model.

MFMN: That's really where you step in, isn't it?

Geraci: Yes. My background is in the brokerage business and the full-service side. I have a number of years' experience in distribution and marketing to intermediaries both in Canada and here in the U.S. with Fidelity. That's really the heart of the market for [Pioneer], so this gets me back into a part of the business that I really enjoy and that's dealing with the investment community.

MFMN: One of the roles you will fill with Pioneer will be leveraging UniCredito's product and service capabilities. How is that likely to manifest itself?

Geraci: UniCredito's strategy in Europe and especially in their core market in Italy is a wealth management strategy. They are a leader there already with respect to things like wrap and separate account capabilities and other types of alternative investment capabilities.

As we all know, the mutual fund market place is so fragmented and it's such a fight for market share right now. I think to be successful firms are going to have to be willing to play in every segment of the investment management arena and consider themselves investment managers, not as fund managers only.

And that's a big distinction for some firms. So if you see yourself as an investment manager it becomes a matter of, How many types of product structures can I put out in the marketplace to catch asset flow?' If you just use mutual funds then you're keeping yourself from a huge area of opportunity in the areas of separate accounts and sub-advised portfolios for the separate account and annuity arenas, etc. It really becomes paramount that companies create as many vehicles through which advisors and intermediaries can push flows.

MFMN: Isn't there a substantial technology investment you have to make in order to develop products and operate in the separate account marketplace?

Geraci: Absolutely. The good news is that the parent company has the platforms already built to support those alternative investments and separate accounts. Where many firms in the mutual fund space have entered into those arenas and had to acquire or build their own platforms, because it is a different business to administer than a mutual fund, we have that capability already in existence. That gives us a leg up. We have experience with it institutionally and for us here it's a matter of taking that off the shelf, getting it packaged and getting out there and getting some distribution relationships established and bringing it to market.

MFMN: From the wholesaler standpoint, they have to get up to speed on the product as well and it's a different animal than a mutual fund.

Geraci: It is a different animal. Back in my Canadian brokerage days I introduced separate accounts to market back in 1989. I can tell you that it's difficult at first for people, whether they are advisors or wholesalers, who aren't familiar with the nuances of it to grasp the differences between it and mutual fund investing and other types of managed accounts. But once they do, it's a very straight forward conversation.

The good news is in this business we're not going direct with the product and because we're dealing with intermediaries, there isn't a wirehouse broker who doesn't know how to present the separate account story to a client because that industry has had it since the late '70s.