Evergreen Investments' new president of global distribution will build up distribution through independent advisers and expand the company's alternative investment offerings, according to his boss.
Peter Cieszko, the newly named global distribution president, will occupy a newly created post in Wachovia Corp.'s investment management unit, and his job will include fostering overseas distribution, said Dennis Ferro, Evergreen's president and CEO.
Mr. Cieszko is to lead on strategy formulation for distribution, products, and long-term growth domestically and abroad, including responsibility for Evergreen's retail, high-net-worth, and institutional distribution and product management groups.
In an interview last week Mr. Ferro singled out building relationships in the independent adviser channel as among the tasks he would like his new employee to help accomplish. Evergreen began focusing on the channel this year.
"We'd like to eventually have 20% to 25% of retail distribution through that channel," he said.
Evergreen's products are currently sold mostly through wire houses and large broker-dealers. Mutual fund companies have been plying the growing independent adviser channel for several years, and Evergreen is late to the game, said Burton Greenwald, a Philadelphia-based mutual fund consultant at BJ Greenwald Associates.
More than other distribution channels, independent advisers embrace funds based on their quality rather than on lobbying by wholesalers, he said.
"Given the right products, they'd have the opportunity" to do well in the independent adviser channel, Mr. Greenwald said. "Their job will be to differentiate their products to a very sophisticated audience."
Another goal is expanding the Charlotte mutual fund company's relationships with the consultants who are the gatekeepers to the institutional market, Mr. Ferro said.
"Peter brings an astute mind, great experience, strong leadership capabilities, and a sense of energy," he said. Mr. Cieszko will use those attributes in his first tasks, which will be to evaluate Evergreen's distribution and then its product line, he added.
Mr. Cieszko, who had run U.S. distribution at Legg Mason since its acquisition of Citigroup Inc.'s asset management business in December, was on vacation last week and not available for an interview.
But Mr. Ferro said that he will have work to do on the product development side as well as with distribution. One task, he said, will probably be helping to develop products, such as long-short equity funds, that give investors "new ways to manage risk." The managers of such funds aim to position them for rising or falling markets by holding long positions but selling short when warranted.
Big fund companies like Putnam and Fidelity have developed such products, he noted.
"It's dipping their toes into hedge fund waters," said Mr. Greenwald, who noted that such products are typically aimed at the so-called mass-affluent investor. Though long-short funds are in demand, they are challenging because managers must be adept at picking both winners and losers, he explained.
"They are very sexy right now, and the public perception is that they are where the smart money is going," Mr. Greenwald said. "But not that many people have been able to have success running some of these hedge funds."
Evergreen's alternative investment platform is modest; it includes a fund of funds platform and a private equity fund.
Mr. Cieszko will also have product development work to do in the fixed-income arena, according to Mr. Ferro. "I feel we have size and strong capability in fixed-income products," he said, "and we need to continue working to structure investment solutions using those products for clients as the retirement explosion of baby boomers continues."
Evergreen Investments, which had $249 billion of assets under management at Dec. 31, is trying to spur what has lately been lackluster asset growth.
Mr. Ferro has said he would like to make the company one of the top 10 investment managers in terms of managed assets by improving its products and distribution. He described Mr. Cieszko's hiring as a milestone in this effort.
"In several years we will have meaningfully increased our array of new products and the revenue we get from them," he said. "We will have meaningfully expanded our distribution capabilities and presence overseas and penetrated market segments domestically in which we do not currently have a meaningful presence."
In February, Evergreen created Wachovia Global Asset Management to foster business in markets abroad, and it named a head of European distribution.
Under Mr. Cieszko, the global asset management unit will "further penetrate the European market and make an initial foray into having a physical presence in Asia," Mr. Ferro said.
