AIM Seeks Better Performance, Sales of GT Funds

AIM Management Group plans to improve the performance of GT Global's mutual funds as it takes over and looks to boost sales of the fund family through banks and other channels.

"Our goal is to add some AIM discipline to their management style and get their net flows back in good shape," said Michael Vessels, the head of Houston-based AIM's bank sales division.

GT's sales through banks have suffered in particular because of poor fund performance and because the company did not have a dedicated bank sales division.

Mr. Vessels said sales through financial institutions last year were "insignificant." So for the short term, at least, AIM does not expect the 25 GT funds to significantly boost overall sales through banks.

"We think it's going to help a little, but not have a huge impact on our division," Mr. Vessels said. "We've got realistic expectations."

Once the funds' performance improves, though, AIM will have an attractive and well-diversified array of products that encompass a wider range of styles and geographic sectors, Mr. Vessels said.

That will appeal to distributors who use an asset allocation approach to investing, he said.

Among GT's few key accounts is First Union Corp., which already uses AIM as one of its main providers.

With the consolidation that went into effect in the beginning of June, GT's funds were relabeled as AIM funds. Houston-based AIM now has more than 50 funds, including GT's array of foreign funds.

The combination of AIM and GT came about when Amvescap PLC, the London- based parent of AIM, bought LGT Asset Management, the parent of San Francisco-based GT, in a reported $1 billion deal that closed last month.

Meanwhile, the future of Raymond R. Cunningham, national sales manager for GT Global, is unclear.

An AIM spokesman said the executive is "still mulling possibilities," but could not say whether he will stay with the company. At press time Mr. Cunningham had not returned a phone call seeking comment.

AIM will handle bank sales of GT products through its corps of 16 wholesalers. GT's sales force accepted buyout offers and left the company at the end of May; the sales operation has been transferred to Houston from San Francisco.

Mr. Vessels, whose division sold $2.5 billion through banks last year and is aiming to surpass $3 billion this year, said some of the GT funds will be folded into existing AIM funds.

One product that the company does expect to sell well through banks is GT's floating-rate bond fund, which features an attractive yield and low volatility.

The product will let AIM compete with Van Kampen American Capital and Eaton Vance, which successfully sell similar funds.

Other GT funds have been less attractive, partly because of the shaky foreign markets where the company invested.

"GT's international products' performance has been subpar, and the international markets, except for the European market, have been pretty rocky," said Burton Greenwald, a mutual fund consultant in Philadelphia.

Still, Mr. Greenwald said, Amvescap has not bought a lemon. He said the GT funds will prove worthwhile as overseas economies improve and more people look to invest their money there.

"They're positioning themselves very well in terms of the next five years," he said. "They may be buying (GT) at the bottom."

AIM, originally a growth-style domestic equity fund shop, has expanded its range through acquisitions. Both its purchase of the Hartford-based Cigna Funds in 1992 and its merger last year with Invesco Inc., under the Amvescap banner, gave the company a value-investing dimension.

Invesco, a no-load company based in Denver, supplies funds to AIM, which AIM sells with a sales load through intermediaries.

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