Bisys Group Inc., a distributor for over 60 bank proprietary mutual fund families, wants to expand its fund-services clientele beyond banks.
The company, based in Little Falls, N.J., has hired James E. Hillman to begin wooing nonbank investment management firms. He joined Bisys on Monday as an executive vice president after more than six years as a tax partner and consultant in the international investment management industry group of Coopers & Lybrand in New York.
Mr. Hillman, who spent 12 years with Deloitte & Touche before joining Coopers, has worked for many of the clients on Bisys' roster, including KeyCorp's Victory Funds.
Bisys is involved with more than $180 billion of mutual fund assets through various services, including record keeping, administration, distribution, and marketing. Its other banks clients include Banc One Corp., Chase Manhattan Corp., First Chicago NBD Corp., and First Union Corp. While keeping them happy, Mr. Hillman plans to serve other money managers.
"The main priority is to expand our services beyond the bank channel," Mr. Hillman said from his New York office. "I hope to bring the firm greater exposure to the nonbank mutual fund arena as well as hedge funds."
Observers said bank and nonbank investment managers require roughly the same fund administration services, so Bisys' background as a bank-fund specialist should not hinder it in the search for new clients.
"They're in a scale business. To the extent they can find more scale outside the bank channel, on the surface at least, it makes perfect sense," said John Truschel, senior analyst of Tower Group, a research and consulting firm in Boston.
However, he noted, Bisys was well known in banking circles as a provider of technology support long before it ventured into mutual fund services. But it lacks such name recognition among nonbanks. "It will be a challenge, but I don't think there is any reason they wouldn't be successful," he said.
Bisys' fund services division has a staff of 800 spread across offices in Columbus, Ohio; San Diego; New York; and Dublin. The latter employs 30 people who administer offshore funds.
Besides building a new clientele, Mr. Hillman is also expected to cross- sell services to bank clients. He reports to David Huber, president of fund services.
"All of our clients buy us because we do administration and record keeping accurately, but they also buy us because we have marketing resources that help them make our assets grow," said Lynn J. Mangum, chairman of Bisys.
"There are certainly more services that they could take advantage of," he added, ticking off examples including common trust fund conversions, sweep account management, marketing support, and offshore funds development and administration.
Bank clients can expect Mr. Hillman to try to sell them services bundled together at a discount.
"By moving and consolidating your services, you often may be able to save a basis point or two, which can be very important," Mr. Hillman said.
