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Rating:Small Fund Firms Share Tips for Success Not Rated 0.0 Email Routing List Email & Route  Print Print
Thursday, October 01, 2009

Small Fund Firms Share Tips for Success

Reported by Armie Margaret Lee

"'How do you beat Mike Tyson? Challenge him to a good game of chess.'"

James FitzGerald, president of Munder Capital Management, shared those words, which he first heard at a seminar in the '90s, to attendees at the MFWire Influencers' Summit: Redefining Distribution Thursday morning at the Four Seasons Hotel in Boston.

"You can't try to play the game the way big players play," he told summit attendees. "It's all about differentiation. It's very important you have an incredibly sharp value proposition."

Munder, he said, doesn't "even try to play the retail game," pointing to the lack of resources. "We are an institutional money manager that also happens to have '40 Act funds," FitzGerald said.

On the sales side, Munder kept people that have backgrounds at advisory shops. "We knew they will be able to talk the talk of FAs better," he said.

He brought up a mid-cap product that, in the '90s, had little assets despite having good performance. Munder renamed the product, identified a handful of partners interested in style-specific areas, and implemented a robust marketing plan that included Web casts and teleconferences. At the end of 2004, the fund had $300 million and now it has $7 billion.

For his part, fellow panelist Ken Anderson of Aston Asset Management said, "We are really small. We try to keep it simple."

Being a small firm, Aston doesn't not have resources to create big marketing plans. "The value add we try to bring to the table is hearing from the investment team itself," he said.

Aston, whose funds are sub-advised, has 10 people targeting the field, which it breaks down by regions as opposed to distribution channel.

"It's not easy to compete with the top five firms," said Ron Redell of TCW.

He cited an advantage that smaller firms have over bigger ones. "We're going through a period of change right now," he noted." Bigger firms are not conducive to change. Smaller firms can change at a quicker pace." 

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