In 1990, when Larry Renfro left his post to join Allmerica Financial, it wasn't just anybody taking another job.

Mr. Renfro was manager of systems and mutual fund operations at giant Fidelity Investments. And he had been recruited by John F. O'Brien, who was Fidelity's No. 2 executive before leaving to run Allmerica.

In his new berth, Mr. Renfro himself began hiring away key executives from other mutual fund companies to build a new fund distribution and servicing unit - 440 Financial Group, based in Worcester, Mass.

|Fidelity West'

Many of the hires, such as Robert Legasey, executive vice president at 440 Financial, had as much as 20 years in the business. In fact, so may came from Fidelity that 440 is sometimes called "Fidelity West."

But the company has also recruited talent from other mutual fund companies, such as the Vanguard Group. Mr. Legasey, 44, had worked for both Fidelity and Vanguard.

In three short years, 440 Financial has grown to 600 full-time employees and has snagged 18 clients - including such big names in the fund business as T. Rowe Price, Invesco, Fleet Financial Group, Stein Roe Farnham, and Wells Fargo.

Revenues were $35 million in 1992. The unit distributes, administers, or services $21 billion in mutual fund assets, including a chunk of bank proprietary funds. It ranks 14th among administrators of bank-related funds, according to Lipper Analytical Service.

Many Kinds of Service

Contracts run the gamut. The company provides fund accounting for eight of its clients and telemarketing and transfer agency services for the same number. Other duties include administration, cash management, distribution, 401 (k) services, and prospectus printing and mailings.

Clients can mix and match services. For example, Fleet Financial Group uses 440 as administrator, distributor, fund accountant, marketer, and transfer agent for its Galaxy Funds.

Among nonbank providers of mutual funds, T. Rowe Price turns to 440 Financial for cash management and telemarketing services. Invesco taps its customer service and telemarketing expertise, and Neuberger & Berman uses its fund accounting and transfer agency services.

Other clients include AMR Investment Services, Bankers Trust, Chubb Investments, Hawthorne Group and National City Corp.'s NCC Funds.

Big Expansion on the Line

The telemarketing and telephone servicing business of 440 Financial has expanded outside the mutual fund business. For example, 440 services a national flower-ordering network, 800-Flowers.

"A big day for us here on the telephones is 85,000 calls," Mr. Legasey said. The number of part-time telemarketing employees can range to 1,800 during holidays or other other crunch periods.

A typical telemarketing contract is to handle night, weekend, and overflow calls for T. Rowe Price and Invesco.

When Denver-based Invesco experienced explosive growth in 1990, it saw an ad in an Investment Company Institute journal and called on 440 Financial to handle the heavy telephone information request volume.

Now 440 Financial has become Invesco's "second site" and also does information processing, statement preparation, and telephone sales for the no-load mutual fund family.

Galaxy Marketing

In marketing Fleet Financial's no-load Galaxy Funds, which have about $3.9 billion in assets, 440 Financial has played a crucial role.

Thomas Howe, executive vice president and manager of Fleet Investment Services, said Fleet moved its distribution and administration from Boston Co. because 440 Financial could provide comparable service in addition to shareholder service and marketing.

Mr. Howe, 440's largest client, likes the attention paid to his funds. "What they've got is a staff with centuries of mutual fund experience, even though it's only three years old," he said. "They have the expertise in hardware, software, and overall experience."

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