Dreyfus Corp., tired of its plain-vanilla image, has launched 10 mutual funds in little more than a year and plans to introduce more this year, its chief executive officer said, as it looks to regain a position as an innovator in the market.
"In 2007, I'd expect to see this period of innovation continue," Thomas Eggers said in an interview last week.
The raft of new portfolios is aimed at baby boomers preparing for retirement, Mr. Eggers said, and is part of a push by Dreyfus, Mellon Financial Corp.'s fund arm, to regain momentum in terms of both fund performance and asset accumulation.
The new funds also exemplify the New York unit's strategy of tapping the subadvisory services of sister asset management units under the Mellon umbrella. Nine of the portfolios are subadvised by, or run by managers from, Mellon units other than Dreyfus.
This year Dreyfus plans to introduce target maturity funds, Mr. Eggers said.
"They are certainly not cutting-edge, but if you are going to address the needs of baby boomers or just the retiree demographic, I think you have to have them," he said.
The funds should be useful to independent advisers and registered investment advisers who lack access to asset allocation tools, he said.
It was unclear how the plan to buy Mellon that Bank of New York Co. announced in December might affect Dreyfus' strategy. A Dreyfus spokeswoman said Mr. Eggers would not discuss issues having to do with the merger.
Dreyfus has "a few other original ideas I think you'll see coming out in the next six months," Mr. Eggers said, however.
Its latest 10 funds have a combined $280 million of assets. They include five that focus on international and overseas stocks — the $14.5 million Emerging Markets Opportunity Fund that is subadvised by WestLB, Mellon Asset Management, the $5.5 million Dreyfus Premier Small Cap Growth Equity Fund that is subadvised by Bear Stearns Asset Management, the $7 million Global Stock Fund that is subadvised by Walter Scott & Partners, the $10.5 million Systematic International Equity Fund that is subadvised by Mellon Equity Associates, and the $15 million International Stock Fund that is subadvised by Walter Scott & Partners.
Dreyfus had had non-U.S. equity funds, but many were closed to new investors, Mr. Eggers said.
"Foreign equity and fixed-income over the last three years has been a growing piece of the pie," he said. "We had to sit it out because most of our products were not available."
Late in 2005, Dreyfus added a vehicle to the international debt markets with its Premier International Bond Fund. Subadvised by Standish Mellon Asset Management, it now has $6 million of assets.
Dreyfus' new portfolios also include the $190 million Global Alpha Fund, run by Mellon Capital Management, which has some of the characteristics of hedge funds.
The fund company has a history of being at the forefront of product development. It was a successful early provider of money market funds to retail investors, and it also pushed successfully for legislation to allow tax-free bond funds. But in the 1980s and 1990s, Dreyfus lost that innovative reputation, Mr. Eggers said.
"We were a company that kind of had everything, but in plain-vanilla form," he said. "We were 'garden variety.' "
Mellon consolidated its 13 asset management businesses last year, and the company moved toward more subadvised products in order to take advantage of Mellon's different units.
As the only retail operation among Mellon's investment management businesses, Dreyfus benefited from the institutional management perspective of its affiliates, Mr. Eggers said.
Dreyfus has been moving to improve its funds' performance as well as beefing up its roster. The company last year tapped Mellon Asset Management's head of alternative investments, Phil Maisano, to be Dreyfus' chief investment officer.
Robert P. Kelly, Mellon's chief executive officer, announced last year that the company plans to consolidate its retail fund distribution brands this year. Dreyfus is the U.S. brand; Newton Management is the U.K. brand; and Mellon Asset Management is used globally.
Dreyfus' reorganization and its new funds are steps in the right direction, said Burton Greenwald, an analyst at BJ Greenwald Associates in Philadelphia.
"They now have a lot more manufacturing resources to draw upon directly," he said. "They are becoming a manager of managers, so to speak, and doing it by filling in gaps in the product line."
