Federated Investors is coming to grips with a frustrating fact of life: Though it is the nation's ninth-largest mutual fund company and enjoys a high profile in the banking industry, few individual investors know it by name.
The Pittsburgh company, which manages nearly $63 billion in mutual fund assets, has traditionally labored in the shadows of bank trust departments and brokerage firms, through which it sells mutual funds and cash management services.
Now Federated is mobilizing a campaign to build its brand-name recognition among consumers. The centerpiece is a $2 million-a-year advertising campaign, which started in The Wall Street Journal and financial industry publications and will likely spread to consumer magazines.
Boosting name recognition is "our No. 1, 2, and 3 priorities," said Stephen Cronin, Federated's director of trust marketing and sales for retirement plan services.
He said the company is responding to pressure from banks.
"Banks that are our clients are saying to us we have to work on enhancing the name of Federated Investors, because so much of the mutual fund industry is being driven by individual investors," Mr. Cronin explained.
The company clearly has an uphill battle. Even loyal clients acknowledge that Federated's low profile can make its products a tough sell.
Bank of Stockton, a California bank with $699 million in assets, has been selling Federated funds to company pension plans for 15 years. Now it wants to set up 401(k) retirement savings plans for four client companies.
"We're out there discussing Federated Investors and their retirement plan division to 401(k) plan participants who had never heard of Federated," said trust officer Lisa Dannen.
But while 401(k) participants clamor for better-known funds, Ms. Dannen doesn't want to write off the bank's 15-year relationship with Federated.
She said the company gives her more access to its portfolio managers than its rivals, so she can monitor the investments of each funds. And Federated is willing to send out its own marketers to educate employees of companies about 401(k) plans, so the bank doesn't have to spend its own resources.
Mutual fund watchdog Don Phillips, president of Morningstar Inc., said boosting its image is a smart goal for Federated.
The company has always sold plain-label products through banks, so "it's always been a behind-the-scenes money manager," Mr. Phillips said. "To get shelf space, it helps to have a brand name like Fidelity, Putnam, Franklin."
For now, Federated is trying to position itself before financial professionals "so they understand us in terms of our management style and they can articulate that to clients," said Dean Genge, director of communications.
Federated has come out with one advertisement so far. With a headline that reads "Positively Boring Money Management," Federated is promoting a conservative investment strategy that has earned it four- and five-star ratings from Morningstar.
"As we continue with our advertising campaign, I expect we will reach beyond into consumer magazines," Mr. Genge said.