PHILADELPHIA - Bank marketing has emerged as a key element in Charles E. Haldeman's strategy to remake Delaware Investments' image.

Mr. Haldeman, who took the reins as Delaware Investments' president and chief executive in January, is trying to help the fund company escape the perception that it is only an institutional large-cap value manager. It is also battling lackluster performance in some of its funds, which has hurt recruiting and morale, Mr. Haldeman said in a recent interview.

The "ultimate goal is to become a major investment management company that is a manager of significant assets in each major asset class," he said, and further to ensure that "we have a good record of performance in each."

Mr. Haldeman, 51, joined the mutual fund arm of Lincoln National Corp. from United Asset Management of Boston. His agenda thus far includes revamped advertising, more ambitious international plans, and a push to expand the roster of banks marketing Delaware's funds.

Delaware sold $325 million of mutual funds through bank brokerages last year. By contrast Putnam Investments, the largest seller through this channel, piled up $9.1 billion of sales, and Aim Management Group of Houston, the No. 2 seller, had $4.4 billion.

Subadvisory agreements have helped Delaware get its foot in the door at banks. It has agreements to subadvise funds for HSBC Holdings PLC, ABN Amro Holding NV, First Tennessee National Corp., and Mercantile Bankshares of Baltimore.

"Banks have been the most active segment in the last six to nine months," said Frank M. Staves, the vice president in charge of Delaware's subadvisory business. During that time, Delaware signed up three banks, he said.

Subadvisory relationships accounted for $5.6 billion of assets under management on March 31, or 11% of the company's total.

By and large banks have not met the "lofty goals" they set for themselves a few years back and have reconciled themselves to looking for partners to round out their offerings, Mr. Staves said.

With or without banks, Delaware has a good distance to make up on the largest fund companies. It was ranked 33d, with $35.8 billion of mutual assets under management on April 28, according to Lipper Inc. of Summit, N.J. Lipper counts only open-end mutual funds for its rankings.

Fidelity Investments, the nation's biggest mutual fund company, had $809.4 billion, and Vanguard Group, the second-largest, had $566.7 billion, Lipper said.

"Unless you are one of the top-tier fund companies ... it's hard to muscle in, from a marketing perspective," said Michael Gaul, an analyst at Morningstar Inc. of Chicago.

Mr. Haldeman said he does not expect to become No. 1 but would like to move up. "Sometimes people at the top get complacent," he said, "and that gives people at the bottom a chance to get up and improve their ranking."

A 26-year industry veteran, Mr. Haldeman has worked for only three companies. His first employer was Cooke & Bieler Inc., an institutional asset manager, which is now under the United Asset umbrella.

Though his experience is on the institutional side, one of Mr. Haldeman's assignments is to strengthen Delaware's retail business. It had $46 billion of assets under management on March 31, including annuities and some institutional money not invested in mutual funds. The retail business accounted for less than half of that.

"One of the lures of retail is generally the fees are higher," said Burton Greenwald, a Philadelphia-based mutual fund consultant. Another advantage is that getting retail business does not depend on evaluations by a handful of influential consultants, he said.

To help boost its retail business, Delaware is separating portfolio management of its institutional and retail products to better serve the differing needs of customers in those areas. It has also stepped up marketing for its retail fund lineup and hopes to put the media spotlight on its portfolio managers.

Advertising will also become a bit splashier, Mr. Haldeman said. Delaware's ads have often been black-and-white and dull - to the point where no one was aware Delaware was advertising, Mr. Haldeman said.

But he contemplates adopting a measured approach, in contrast to the glitz favored by some larger competitors. "We're not going to have Don Rickles," Mr. Haldeman said, referring to one of Fidelity's marketing campaigns last year.

Mr. Haldeman would like to change a belief held by some that Delaware is purely a value-based manager, an investing style that is out of favor just now. "We have changed the reality more than the perception," he said.

Indeed, Delaware has a well-rounded mix of funds, and many have good performance records, said Edward S. Rosenbaum, a research director at Lipper.

Its Select Growth Fund had $1.9 billion of assets on March 31 and had brought in $1.1 billion of new money in the preceding 12 months, according to Strategic Insight. The fund had a three-year cumulative return of 378%, the New York fund tracking company said.

The Delaware Trend Fund had $1.5 billion on March 31, having brought in more than $200 million during the preceding year, and it produced a three-year return of 204%, Strategic Insight said.

Nonetheless, some of the company's portfolios have fallen on hard times.

Class A shares of the Delaware Decatur Equity Income Fund, for example, had about $1.3 billion of assets on April 30, compared with about $2 billion the year earlier, according to Morningstar. And on April 30, 1998, it had $2.1 billion. "A lot of it depends on which fund performance you choose to emphasize," said Mr. Rosenbaum.

Meanwhile the way Delaware sells its funds through intermediaries is changing due to revamped wholesaling efforts by Lincoln National, its parent.

The company is creating account manager posts to coordinate the wholesaling of all its products - life insurance, fixed and variable annuities, retirement products, and mutual funds - said Westley V. Thompson, president and chief executive of Lincoln's distribution arm.

This will let Lincoln coordinate wholesaler visits, avoid product overlap, and better compete for shelf space, Mr. Thompson said. "It's frustrating for a gatekeeper at a bank to see wholesalers coming in without any concept of what another part of the company was doing."

At some point wholesalers may market more than one product, but Mr. Thompson said the company does not have a time frame for such a change.

Lincoln has about 125 field wholesalers, including about 50 of Delaware's. Forty-five focus on life insurance, and 15 on 401(k) plans. The company is building a wholesaling force for variable annuities and plans to have 25 by yearend, Mr. Thompson said.

Mr. Haldeman said the company would also like to expand internationally. Delaware has some global fixed-income and equity funds that it manages out of London for U.S. institutional clients and has the beginnings of a marketing staff there, he said.

The company would also like to manage money for institutional clients in Europe and Japan as well as to reach subadvisory agreements overseas, Mr. Haldeman said. But Delaware is steering clear of offshore funds - an increasingly popular offering among investors outside the United States.

"We feel like we don't have sufficient knowledge of the non-U.S. market," he said.

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