New York Life Investment Management is increasing its marketing efforts, launching new products, and hiring staff to increase distribution while competitors, wary of scandals and market conditions, remain on the sidelines.
Chris Blunt, the New York Life Insurance Co. unit’s executive vice president of retail investments, said its mutual fund family, Mainstay Funds, will double its $16 billion of assets over the next three to five years with an aggressive sales strategy.
“The opportunity to grow the mutual fund and managed account business is greater now than it has been in five years due to the regulatory environment,” he said.
Mr. Blunt, who was hired by New York Life Investment two months ago, said the mutual fund scandals have changed the landscape of the investment community.
Before the scandals, a few powerful companies had a “stranglehold on mutual fund distribution,” but now the market has changed, he said. “Some of the large players are playing defense, and the smaller players are deciding that they need to get out of the business. Firms have to still offer these products, and they have to find someone to partner with. New York Life Investment Management is taking a long view on this. … While a lot of people see declining margins and regulatory issues, we see opportunity.”
In May it launched a floating-rate fund that already has generated $300 million of assets.
And last week, New York Life Investment announced the hiring of three people to help increase investment products sales.
Michael Coffey, who was a director for BlackRock Financial Management, was hired to expand retail sales as a director of distribution strategies. Phillip Gazzo, who was chief executive officer of VeraVest Investment Advisors, was hired as the Southern divisional sales manager. Christopher Parisi, who had also worked for BlackRock, was hired as the Northern divisional sales manager.
Mr. Blunt said New York Life Investment is not finished hiring. It will extend offers to two or three wholesalers over the next few months and will make further additions over the next 12 months.
“This is a terrific environment to be recruiting,” he said. “We have a strong brand and good credibility, and this gives us a good story for our wholesalers and our marketers to tell.”
New York Life Investment has $180 billion of assets under management, and though the market environment is difficult to predict, Mr. Blunt said he has confidence the market will rebound.
Analysts said the aggressive strategy is sound. According to a study by Raddon Financial Group Inc., an Oakbrook Terrace, Ill., research firm, wary investors will return to the market once there is a sustained rally for six months.
Raddon’s study found that 37% of consumer households say the market will rebound and become the best avenue for long-term investment opportunities.
Burton Greenwald of BJ Greenwald Associates, a Philadelphia consulting firm, said, “Most money managers believe the safest route is to remain on the sidelines right now. It is a good time develop staff when everyone else would prefer to stand still.”
Mr. Blunt said now that his firm is adding staff and products, it has to help advisers expand their business to increase market share.
“Advisers are more hungry than ever for sales ideas, marketing support, and true value-added wholesalers,” he said.
