BOSTON — Say goodbye to the Green Mountain Boy.
As part of an ambitious growth strategy designed to get its mutual funds noticed by distributors, Montpelier, Vt.-based Sentinel Asset Management Inc. is retiring its decades-old icon.
BOSTON — Say goodbye to the Green Mountain Boy.
As part of an ambitious growth strategy designed to get its mutual funds noticed by distributors, Montpelier, Vt.-based Sentinel Asset Management Inc. is retiring its decades-old icon.
In more substantive moves, Sentinel’s president and chief executive, Christian Thwaites, has pruned the Sentinel Funds lineup and lured talent from rivals such as MFS Investment Management of Boston and T. Rowe Price Group Inc. of Baltimore. He has also made acquisitions, including Bramwell Capital Management Inc. of New York last year and four funds from Synovus Financial Group Inc. of Columbus, Ga., in May.
And Mr. Thwaites isn’t done shopping.
Mr. Thwaites, a British-born Grateful Dead fan who sometimes rides a motorcycle to work, hopes to announce two more acquisitions by September.
‘Non-organic’ growth
“We are looking for a value manager,” said Mr. Thwaites, 49, who declined to provide details of the two planned purchases, including what type of firm the other acquisition would involve. “We certainly plan to grow this firm by non-organic means.”
Sentinel Funds, one of the oldest U.S. mutual fund groups, could use some growth. It has just $5.5 billion in assets despite being around for more than 70 years.
The firm has 12 stock and bond funds, down from about 17 in February 2005, when Mr. Thwaites joined its insurance company parent, National Life Group, also of Montpelier, from Skandia Global Funds PLC in London, where he served as chief executive.
Of those 12 funds, eight are rated three, four or five stars by Morningstar Inc. of Chicago.
“One of the things we want to present to a fund selection unit is to say, ‘Here is a firm with all-around good performance,’” said Mr. Thwaites, whose firm manages about $18 billion, including institutional money.
Brokerage firms’ fund selection units — or, as Jeff Strange of Cerulli Associates Inc. calls them, “central due diligence groups” — have come to play an increasingly important role in selecting the funds that financial advisers associated with those firms ultimately recommend to clients.
“Asset managers with good performance will always get flows,” Mr. Strange, a senior analyst at Boston-based Cerulli, said. “But these due diligence groups are increasingly presiding over not only manager access to platforms but also how they are built into recommended asset allocation models provided to advisers.”
Mr. Thwaites’ recent hires have included Jim Cronin, president of Sentinel Financial Services Co., Sentinel Funds’ distributor, who joined in December. Previously, Mr. Cronin worked at MFS, where he was responsible for sales of mutual funds, separate accounts and retirement plans throughout the Northeast.
“The distribution effort to the outside world at Sentinel is almost brand-new,” said Mr. Cronin, adding that Sentinel had a relatively small group of field wholesalers whose primary responsibility was to call on representatives from Equity Services Inc., National Life’s broker-dealer. “There was a limited effort to establish relationships at the major dealer firms.”
Sentinel didn’t have a “true marketing effort” for some time, either, said Bruce Hoffmann, who joined Sentinel Financial in February as director of marketing.
“Our strategy is really working closely with the gatekeepers and the fund selection units at key firms where we either are on platforms or we want to increase our relationships with these firms,” said Mr. Hoffmann, who headed U.S. institutional marketing for T. Rowe Price before joining Sentinel.
Bye-bye, icon
Retiring the Green Mountain Boy icon is a good idea, he said.
“We’ve gotten a lot of feedback through our focus groups and from our adviser relationships that the old image was dated, regional,” he said. It “wasn’t reflective of all the excellent work that was being done here.”
Sentinel Funds is now part of a larger entity, called Sentinel Investments. The change was made to emphasize that Sentinel offers more than just mutual funds, Mr. Hoffmann said.
“We have retirement solutions in terms of [individual retirement accounts] and variable annuity portfolios,” he said. “We also offer institutional investment management.”
Mr. Thwaites also hired Clara Sierra, who joined Sentinel Financial in April as executive vice president and director of dealer relations. She joined Sentinel from AIG Advisor Group, a unit of American International Group Inc. of New York.
Ms. Sierra is responsible for Sentinel’s fund selection unit and key-account-management teams. Typically, client firms now have a “master gatekeeper,” which is the key-account, or business, relationship, as well as a separate fund selection unit, she said.
More ‘mechanical’
A good relationship with one doesn’t guarantee acceptance by the other, Ms. Sierra said.
Fund selection units are more “mechanical,” she said. They want detailed information on factors such as performance and risk tolerance before they will even consider screening a firm’s funds, Ms. Sierra said.
“Fund selection units are what’s driving the industry,” she said, adding that their impact has increased over the past three years. “Our portfolio managers are accessible to these fund selection units, and I think that’s a big plus.”
Sentinel has more than 700 selling agreements with firms, Ms. Sierra said. One of the first orders of business for her was to prioritize those relationships.
“You can’t run 500 miles an hour for 40 firms,” Ms. Sierra said. “We’ve identified an A, B and C list.”
A-list clients include big firms such as Merrill Lynch & Co. Inc. of New York, smaller firms that have been longtime clients and, of course, Equity Services, Ms. Sierra said.
Focusing on a limited number of firms and their fund selection units will allow Sentinel to succeed with less infrastructure investment, Mr. Cronin said.
Fund selection units are staffed by “highly technical” people, he said. To serve them, Sentinel has created an investment strategy group, which includes two chartered financial analysts, as well as support staff.
The group “will speak the same language and be able to address the concerns that those fund selection units have,” Mr. Cronin said.
It is a good idea for fund firms to build specialized groups to work with fund selection units, Mr. Strange said.
“The [broker-dealer] firms are looking for a more focused point of contact, as well as a more technical interface,” he said. “Small fund shops can definitely get more bang for their buck by successfully addressing these centralized groups.”
