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Berger Forges Ahead in VA Channel


Berger Funds has developed a concerted push into the variable annuity and variable life sub-advisory market, adding two carriers to its list of clients in December. Within the last year, the Denver-based firm has increased its visibility, becoming a regular exhibitor at National Association for Variable Annuity conferences.

"We have been out in the annuity marketplace for the last five or six years, but we've focused more on it in the last 12 to 18 months and done such things as taken a higher profile at the NAVA conferences," said Dave Mertens, senior VP of institutional marketing and sales.

Outside of the cost of a single senior sales person and three part-time wholesalers, marketing costs have been limited, said Mertens. "The conferences themselves were a pretty nominal cost, so that was not a great deal of expense," he said, adding that the firm foresees a time when it will invest more in the variable product marketing effort.

"I think longer-term as we get added to more annuity contracts, that's when the real cost will come about, when we really have to beef up our wholesaling sales force. We have a commitment to do that when the time is right," explained Mertens.

Room to Grow

Berger, with $5.8 billion in assets under management (as of Nov. 31, 2001), according to Financial Research Corp., has only $350 million in VA's. "We understand that the big players in the business want to see us be more substantial in size, both on the firm level and in the VA channel," he said. "Our near-term goals are to add more names to our client list, more assets to our VA channel."

Besides VA's, Berger has also focused its efforts on the variable life channel. With fewer assets, the competition is thinner but may be growing. "I think most fund companies have taken notice of the opportunities in variable life, but it seems to be a less crowded marketplace," said Mertens.

Building Out the Product Line

To foster its variable product marketing, Mertens also said that Berger has been developing a series trust line that mirrors its fund lineup. On January 1, Berger swayed from its growth bent by launching mid-cap and large-cap value products (bringing the total to eight), in response to the industry's demand for such products.

Despite its traditional image as a growth shop, Berger has diversified its offerings through its sub-advisory relationships. Its affiliations with Chicago-based value shop Perkins, Wolf, McDonnell & Co. and Bank of Ireland Asset Management, in place for several years, have added breadth to Berger and the acquisition of San Francisco-based Bay Isle Financial Corporation has further solidified the value component within the firm's investment stable.

"In Denver, we are and always have been a growth equity shop," said Mertens, who put the changes at Berger into larger context. "Over the last five years, its positioned itself as more of a distribution and service organization," said Mertens.