The asset manager Security Global Investors has agreed to hire a growth equity investment team from a unit of Nationwide Financial Services Inc.
Nationwide is known for using only subadvised funds within its variable annuity and life investment programs.
Eighteen months ago the Columbus, Ohio, company decided to use subadvisers for its mutual fund wrap products and separately managed accounts as well, and it has been divesting its active asset management units.
In October 2006, it sold Gartmore Investment Management PLC to a private-equity firm, and in the spring of this year it sold its retail asset management business, NWD Investment Management Inc.
"Nationwide wanted to distribute investment products. They wanted all of the asset management to be subadvised," said Mark Bronzo, a portfolio manager who leads the nine-person team that is to join Security Global in early February.
Nationwide was "slowly selling off all of its affiliated managers," Mr. Bronzo said. It "wasn't interested in exiting the managed account business" and the company "wanted to get out of active asset management."
Richard Goldman, Security Global's president, said the addition of the team from Nationwide Separate Accounts, a subsidiary of NWD Investments, will enable the Security Benefit Corp. asset management arm to offer more products and eventually expand distribution.
The nine-member team currently manages $475 million of assets across three managed accounts — a large-cap growth account, a midcap growth account, and a high-grade fixed-income account The new team will official join Security Global in February.
Security Global, which already offered value and fixed-income products, had accumulated $10 billion of assets under management by distributing its products to retirement plans. Mr. Goldman said with these new products he wants to expand distribution to third-party platforms.
Three months ago the Topeka, Kan., company hired Marc Zeitoun, a former UBS executive, to help it develop distribution relationships with wire houses and third-party platforms.
Mr. Goldman said the new strategy will allow Security Global to increase its assets under management by 20% a year.
"If we can add $2 billion a year for the next five years, we will more than double our business," Mr. Goldman said in an interview on Tuesday when the company announced its plan to add the team from Nationwide.
This is the second time in the past six months that Security Global has added a team. In July it bought a global equity team from Avera Global Partners of San Francisco. Mr. Goldman said Security Global will continue to pursue opportunities to add investment teams.
