With a new title, Dreyfus Corp.'s Christopher W. "Kip" Condron plans to keep building the mutual fund company's equity portfolios and its relationship with national brokerages.
Last Thursday, Mellon Bank Corp. named Mr. Condron chief executive of its New York-based mutual fund company, which manages $83 billion in 175 mutual fund portfolios.
A Mellon vice chairman, Mr. Condron has run Dreyfus' day-to-day operations since November. But as Howard Stein, Dreyfus' longtime chief, retires at the end of the week, Mr. Condron will step into that role officially. He will continue to work closely with another Mellon vice chairman, W. Keith Smith, who will succeed Mr. Stein as chairman.
In a telephone interview, Mr. Condron, who arrived at Mellon via its 1993 acquisition of Boston Co., laid out his and Mr. Smith's objectives for Dreyfus. Chief among them is to continue to shed Dreyfus' identity as a manager of cash and fixed-income portfolios.
"We've got a big challenge. Dreyfus, out of necessity, is diligently working to get known as an equity fund manager," Mr. Condron said.
When Mellon acquired Dreyfus two years ago, equity mutual funds represented approximately 10% of assets managed by Dreyfus. Today, the equity funds represent 16% of assets.
"Even in the month of July with all the turmoil in the markets, we had a positive flow of equity funds," Mr. Condron said. "Things are moving along the way we want them to, but we have a big agenda ahead of us."
A major part of that agenda is to push Dreyfus funds through every distribution channel available. Mr. Condron, who was a financial planner before becoming a banker, said he is particularly interested in getting brokers to sell more Dreyfus funds. Dreyfus is talking with Merrill Lynch & Co. and with Prudential Securities about carrying Dreyfus funds, he said.
"We're very attractive to the broker-dealer community because we've always worked with them," Mr. Condron added.
Dreyfus recently was named a preferred provider for Smith Barney's new no-load fund program and one of 10 firms in American Express' new investment sales program, dubbed Financial Direct.
Although outsiders are impressed with the inroads made by Mr. Condron, some say Dreyfus is not yet entrenched in the brokerage market.
"Dreyfus historically had weak distribution through that channel because they've been a direct distributor," said Lawrence W. Cohn, a bank analyst at PaineWebber Inc.
"Mellon bought a money market and municipal bond fund manager. Those are commodity products amenable to being sold through an ad in The Wall Street Journal," Mr. Cohn said. "Its much more difficult to distribute equity funds."
Mr. Condron said one channel that is embracing Dreyfus equity and bond funds is banks. Sales through banks - mostly Mellon itself - are up 250% year-to-date, he said. He declined to disclose actual sales volume.
Other conduits include Dreyfus' own investment centers that stand-alone in heavily trafficked areas such as New York's Grand Central Station and the company's Web page on the Internet, through which 600 accounts were set up this year.
In addition to building distribution, Mr. Condron and his team have improved Dreyfus' equity product line enough to catch the eye of outsiders.
"The year-to-date track record is tremendous," said Dennis F. Shea, an analyst at Morgan Stanley & Co. "The performance has picked up, and that's why you've seen a big inflow."
Mr. Shea said he is confident that Mellon's goals for Dreyfus will be attained.
Mr. Condron's "biggest challenge is to get the equity funds sold through various distribution in order to grow them," Mr. Shea added. "It is a question of time, rather than an if."
Nevertheless, Mellon executives still have some thorns to pull from Dreyfus' side.
"Dreyfus has two problems: They don't have a long track record to sell and they don't have enough distribution," Mr. Cohn said. "So they are simultaneously trying to build both. That is a difficult task, but one that has to be done."