MutualFundWire.com
The insiders' edge for 40 Act industry executives!
an InvestmentWires' Publication
an InvestmentWires' Publication
|
|
MutualFundWire.com
The insiders' edge for 40 Act industry executives!
an InvestmentWires' Publication |
|
Monday, August 16, 2004 Constellation Shoots for the Stars Four months ago, Constellation Funds did not exist. Now, the fund family, created by a spin-off of 12 funds from Turner Investment Partners, has already doubled the number of funds in their lineup. The latest additions are nine funds with $800 million in assets from the Pitcairn family. Following the pattern set by its earlier acquisitions, Constellation Investment Management will keep the funds' original managers as subadvisors to the new funds. Constellation completed the acquisition of the funds on August 1. Prior to the Pitcairn acquisition, Constellation's board of trustees approved the acquisition of J.J.B. Hilliard, W.L. Lyons' $36 million Hilliard Lyons Growth Fund in mid-June. The transaction is pending shareholder approval in September. Although the newly created fund company now includes 22 funds with more than $2.1 billion in assets, more growth is in store for the fund firm. Constellation executives talked with the MFWire about the fund firm's future plans.
Although they have not yet targeted specific asset classes to add, Constellation's focus is on repeating a formula that they have thus far found successful -- finding good money managers who want better access to fund administration and distribution. The firm targets managers who want to retain access to the fund marketplace, but cannot dedicate the necessary resources for the infrastructure that requires, said Duling. Duling cited regulatory and distribution costs as part of the rising costs of infrastructure. Duling resisted the idea that Constellation serves as a "shell" to money managers: "we're actively responsible for the management, administration and distribution of the funds. We effectively hire other money mangers to serve as subadvisors." When acquiring funds, Constellation tries to maintain the funds' investment objectives and the managers that made the funds successful to begin with, said Duling. That mantra seems to be true for Constellation's past acquisitions. Constellation's fund subadvisors include: Clover Capital Management, Chartwell Investment Partners, Hilliard Lyons Asset Management, Pitcairn Investment Management, Turner Investment Partners, Sands Capital Management, The Boston Company Asset Management, Brandywine Asset Management, and Oechsle International Advisors. Although many of the fund family's past acquisitions are a result of pre-existing relationships from ex-Turner (now Constellation) employees and fund managers, Duling characterized the manager search process as following a "pretty traditional model." The acquisitions are for a larger goal, said Duling. "After spinning out of Turner, our goal really is to put together a comprehensive fund lineup that will offer high quality investment solutions to the intermediary market," said Duling. Although Duling would not name a set number of funds that would achieve this goal, she did say that "Constellation has a good lineup currently…that would allow us a lot of room to grow." Acquisitions are not the only moves that Constellation is making. The company has added three sales staff in the last several months, said Duling. Constellation now has a sales and distribution team of five. Frank McAleer, executive vice president, heads distribution and also covers wirehouse distribution; Bill Higgins, vice president of business development, is responsible for the defined contribution and 401(k) channels; Kevin Millsom, vice president of business development, handles the broker-dealer and advisor channel; Laura Sharpless, vice president of national accounts, is responsible for client services; and one other employee serves as an internal wholesaler. Printed from: MFWire.com/story.asp?s=7818 Copyright 2004, InvestmentWires, Inc. All Rights Reserved | ||||||||||||||||||||||||||||