Backed with cash and confidence from a new corporate parent, Zurich- Kemper Investments is seeking to reclaim its position as a dominant seller of mutual funds through banks.

A tumultuous two years on the auction block, coupled with underperforming funds and the bear market of 1994, had reduced Kemper's sales through banks to $450 million in 1995, down 70% from the 1993 peak of $1.5 billion.

Major institutions, including Norwest Corp., First Interstate Bancorp, NationsBank Corp., and Great Western Financial Corp., stopped promoting the company's funds as one suitor after another walked away from Kemper.

"They didn't know if we were going to be bought by a brokerage firm, an insurance company, or a bank," said James Greenawalt, executive vice president and director of sales. But now that that issue is settled, "we're anxious to get back in the game."

Mr. Greenawalt said Kemper got its new lease on life in January when Zurich Insurance Group bought the company for $2 billion. The Swiss insurance conglomerate moved quickly to put its mark on Kemper.

First, it gave Kemper a $20 million annual advertising budget. Then it brought in consulting giant McKinsey & Co. to review corporate strategies, including penetration of bank trust departments.

Zurich Insurance also focused Kemper on managing assets, instead of offering investment advice. The company spun off its brokerage subsidiary, Kemper Securities, and sold Invest Financial Corp., a marketer that helps banks manage their brokerages.

What's more, the Swiss parent doubled, to 450, Mr. Greenawalt's sales force, which peddles Kemper's wares to investment advisers at banks, brokerages, and financial planning firms.

"We can retell our story," Mr. Greenawalt said. "The uncertainty is over."

But for Mr. Greenawalt, the pressure is only just beginning.

Zurich Insurance executives have given Kemper two years to turn around its declining earnings. And they have set a five-year deadline for doubling its assets under management, to $70 billion.

As a result, Mr. Greenawalt's "job becomes more important," said William Hostler, senior vice president for marketing services at the Delaware Group, a Kemper competitor. "There's more pressure on him and his people now to increase volume."

Clearly, Mr. Greenawalt is not standing idly by. He has rejiggered management of his bank division, adjusting the responsibilities of its two top executives. Henry Schulthesz, the bank division's former national sales director, is now running the unit.

The division's other former national sales director, Terrence Cunningham, is now national accounts manager, reporting to Mr. Schulthesz.

The idea is to enable Mr. Schulthesz and Mr. Cunningham to develop strong ties to top executives at bank brokerages. Previously, Kemper's bank division dealt directly with bank brokers, but now it wants to do deal with their bosses.

"When you lose sight of those relationships, and you just focus on the sheer volume coming through the door, that's when your position as No. 1 becomes No. 2, then 3, then 4," Mr. Schulthesz said.

Indeed, Mr. Greenawalt himself sometimes accompanies Mr. Schulthesz and Mr. Cunningham on calls to potential big-bank clients.

The renewed emphasis on banks is not surprising, considering that Kemper was a leading seller of mutual funds through banks for much of the early 1990s. But mutual fund sales through banks plummeted 50% during the 1994 market downturn, and Kemper fared worse as concerns over ownership dogged the company.

Some banks stuck with Kemper through thick and thin. But those that did not could be difficult to bring back into the fold. Unlike brokerage houses, banks have significantly cut their lists of "preferred vendors," hoping to make their programs more easy to manage.

"Kemper has tried to get on my calendar, and I've resisted a little bit," said Jack Kopnisky, president of the brokerage unit at KeyCorp, Cleveland. "Everybody wants to sell their mutual funds through our bank."

Mr. Kopnisky, however, has recently agreed to meet with Mr. Schulthesz and one of his McKinsey consultants.

"They're very serious about getting back into the business," Mr. Kopnisky said.

Zurich-Kemper has had other successes, too. It recently persuaded some large banks, including First Chicago NBD Corp., St. Paul Bancorp, and U.S. Bancorp, to put Kemper funds back on their preferred lists, Mr. Schulthesz says.

And the company, always a big seller of 401(k) services through banks, snared three clients for that business in First Chicago, Boatmen's Bancshares, and Chase Manhattan Corp.

Indeed, Mr. Schulthesz said, sales through banks for the first four months of 1996 are 60% of total 1995 sales through banks.

Kemper began broadening its product line even before the acquisition. Last year, it bought Dreman Value Management Ltd., which manages $1.5 billion with a "value" style, investing in established companies with expected earnings growth.

"Everyone said Kemper was going down the tubes - they're not what they used to be - but that was before they had value funds," said Don Phillips, president of Chicago-based Morningstar Inc., which tracks mutual fund performance.

Selling Invest was another positive step.

"We like them better as cousins," Mr. Schulthesz said of Invest.

Financial intermediaries didn't like selling the portfolios of a company that had a fleet of brokers competing with them, he explained. And Kemper couldn't get its funds on the rosters of marketing firms that competed with Invest.

As for Mr. Greenawalt, people who know him say the barrel-chested former linebacker for the University of North Carolina is well cut out for taking assignments from a demanding new corporate parent.

"He's got the right personality," said Merlin Gackle, Invest's chairman. "He's very stable and calm, and he has a real passion for what he does."

Mr. Greenawalt acknowledged that Kemper executives had gotten cocky in their boom years and didn't pay attention to criticism. But that has changed, he said.

"We're humble, self-effacing," Mr. Greenawalt said. "We are not overconfident."

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