Affiliated Managers Plans New Fund, SMA Platform
August 30, 2004
Affiliated Managers Group last week announced it will create a new subsidiary to create, distribute and service separately managed accounts and mutual funds. To be called Managers Investment Group, the new unit amounts to a minor sea change in AMG's business tactics, which mainly focus on bringing distribution muscle to boutique investment firms in exchange for a stake in their operations. AMG intends for Managers Investment Group to act as a servicing hub for at least 75 mutual funds and separately managed accounts now sold through banks, brokerage firms and independent distributors. The soon-to-be launched platform will utilize the operational and distribution expertise of the company's fund family (Managers Funds), institutional investment subsidiary (Portfolio Services Group) and back-office unit (Advantage Outsourcing Solutions) and partner with the marketing division of Rorer Asset Management.
NASD Hits Nat'l Securities With Market-Timing Suit
Setting a precedent for itself, the National Association of Securities Dealers will not allow a Seattle-based firm to open mutual funds for new clients for 30 days, citing the company's allowance of improper market-timing trades. From January 2001 until August 2002, the NASD says National Securities Corp. aided four hedge funds to execute shifty, in-and-out trades in 13 different mutual funds, all of which were backed with policies prohibiting such trades. "This is an example of a firm whose management has totally ignored repeated red flags that its brokers were facilitating deceptive and improper market timing in mutual funds by hedge fund clients," said Mary Schapiro, the NASD's vice chairman. The NASD said National Securities permitted at least 1,000 mutual fund trades, totaling nearly $400 million, to be conducted by the market timers. Approximately $300,000 was made by the companies timing the market. National Securities, a division of Olympia Cascade Financial Corp., was further punished to the tune of a $300,000 fine for the company and an additional $25,000 worth of fines for its president, Michael A. Bresner, who was also suspended for a month.
Assets in 529 Savings Plans Reach $43 Billion: FRC
Assets in fast-growing 529 college savings plans reached $43 billion at the end of the second quarter, according to data collected by Financial Research Corp. The new peak for 529 plans represents a 7.4% jump in overall assets under management from the previous quarter and a sharp 66.9% spike from the second quarter in 2003, when plan assets only totaled $25.8 billion. "Investors and families continue to embrace the 529 approach, recognizing, among other features, the powerful tax incentives that the plans offer for college savings," said Chuck Toth, chairman of the College Savings Foundation, an advocacy group for 529 plans. But 529 plans are in danger of coming to an end in several years, according to Toth, when these investment vehicles lose their federal tax-free distribution status in 2010. Toth has called on members of Congress to extend the deadline.