The asset management arm of Unionbancal Corp. is taking its mutual fund national.
Until a year ago the $9 billion-asset HighMark Funds were sold only through branches of Union Bank of California, whose $32.3 billion-asset holding company is mostly owned by Bank of Tokyo-Mitsubishi Ltd.
To boost assets, HighMark Capital Management Inc. has started selling through regional broker-dealers and registered investment advisers, mostly in western states, including California, Arizona, Nevada, and Oregon.
And the company is looking to expand into the Midwest and the Southeast by the first quarter, said R. Gregory Knopf, the managing director of mutual funds. "We're gradually working our way eastward," he said.
HighMark already has selling agreements with 70 brokerages and investment firms. It is looking to hire two more wholesalers, bringing its total to five.
Still, HighMark has its work cut out for it. Building a national presence takes time and money, observers said.
You "can count on one hand" the banks that are significant national players, said Gary S. MacDonald, senior vice president of marketing and new business development at Boston-based Funds Distributor Inc.
Charlotte, N.C.-based First Union Corp., for example, has made headway, but it grew through acquisitions, which requires "a big check," Mr. MacDonald said.
Mr. Knopf said HighMark is considering buying asset management capabilities and has hired Optima Group of Fairfield, Conn., to help.
HighMark is also trying to generate leads for brokers through radio advertising that promises people who call a toll-free number a gift such as an asset-allocation calculator. Callers are asked a series of questions and their names are referred to brokers with whom HighMark does business.
The ads have been running since March in San Francisco-Unionbancal's headquarters city-and in Los Angeles, San Diego, Seattle, Portland, Ore., Phoenix, Reno, Las Vegas, Salt Lake City, and Chicago, Mr. Knopf said. He said the radio spots are generating a "significant amount of leads daily," though he declined to say how many.
A. Stewart Rose, the president of Winthrop Financial Marketing of Bridgeport, Conn., called this a solid strategy. "If they can show that they can do lead generation for brokers, the brokers are going to use their product," he said.
Mr. Knopf said HighMark's advertising budget for 1999 is $1.5 million.
In addition, HighMark is developing a mutual fund wrap program that can be used by brokerages that do not have their own. And in response to requests from brokers, the company is creating C shares for its equity funds, Mr. Knopf said.
The firm has decided not to pitch itself to huge wire houses and concentrate instead on brokerages with 15 to 20 offices. That way wholesalers can guarantee routine access to brokers and set up more frequent seminars and client visits, Mr. Knopf said.
"We're not going out there trying to be everything to everybody," he said.
