The new president of Munder Capital Management, James V. FitzGerald, said the investment manager will pursue acquisitions in the next three to five years as part of an aggressive growth plan.
FitzGerald, who was promoted to president Monday, said the Birmingham, Mich., company, which had $14 billion of assets under management as of March 31, expects to have more than $30 billion within the next three years and $45 billion within the next five years. Though he said Munder will add assets by expanding organically, he plans to concentrate heavily on buying small investment managers.
Analysts say that strategy in the current climate could be risky for Munder, which separated from Comerica Inc. in a management-led buyout less than three years ago.
FitzGerald says he is confident, however. "For a small firm, our shadow is greater than our footprint," he said in an interview Tuesday. "We want to expand strategically to round out what we are currently offering."
Munder was founded 21 years ago. It sold itself to Comerica in 2000 and became independent again through the January 2007 management buyout, which had the financial backing of the New York private-equity firm Crestview Partners Inc.
Munder offers domestic equity and fixed-income and international equity products. FitzGerald, 49, said it is interested in acquiring investment firms and hiring portfolio managers with other specialties, including value managers, aggressive growth managers, international emerging market managers and alternative investment managers.
"We believe that we have a stronger value proposition that makes us attractive to other investment teams or to acquire entire firms," he said.
Munder has been looking to develop its investment capabilities since it was divested by Comerica, FitzGerald said. In August 2007 it added a team of seven investment managers from Boston Co., a unit of Bank of New York Mellon Corp., who specialized in international equity management. The team brought with it $5 billion of assets under management.
Analysts said Munder is looking to buy at a time when many financial services companies are fleeing wealth management because of difficult economic conditions and to focus on their core businesses.
"It is a bit risky, but there are a lot of opportunities to make deals and hire managers right now," said Burton Greenwald of BJ Greenwald Associates in Philadelphia.
FitzGerald, who has worked at Munder since 2004 and was its chief marketing officer before this week's promotion, said it could have an opportunity — given its history in the bank channel — "to work with banks that are looking to divest wealth management groups because we have a good understanding of the positives, the challenges and the opportunities of working with those banking firms."
Analysts said Comerica divested Munder to get out of proprietary wealth management, but Munder continues to distribute its products to Comerica's customers.
FitzGerald, a member of Munder's operating and product policy committees, said this is the "opportune time" to build the wealth management business, primarily because the industry is in "such a state of flux."