Banks are starting to recognize Van Kampen Investments' strength as an equity manager, according to an executive with the company.
Van Kampen's equity funds have accounted for more than 85% of its sales through banks so far this year, said Greg Heffington, national account director for financial institutions. The figure last year was less than 40%.
The big sellers last year were senior loan funds -- baskets of commercial loans made to various companies, including those that issue below-investment-grade debt. Last year such products accounted for more than half of Van Kampen's bank sales.
This year the figure is just 10% so far, Mr. Heffington said, and competition is partly to blame. In the past 18 months a huge number of companies have begun to offer senior loan products. "There are just a lot of players in the game today," Mr. Heffington said.
Van Kampen, which is based in Oakbrook Terrace, Ill., had $87.7 billion of assets under management on March 24. That includes $45.9 billion of equity funds, $10.3 billion of fixed-income, about $780 million of money market funds, and $13.3 billion of senior loan funds.
"We have successfully reinvented ourselves in the eyes of the bank brokers," he added. Van Kampen, which is owned by Morgan Stanley Dean Witter, is getting the word out about its equity products at a time when the market is focused squarely on stocks. Investors poured $39.98 billion into stock funds in January -- the most recent month for which data is available -- representing a 131.9% increase from the previous year, according to the Investment Company Institute.
By contrast, taxable bond funds bled $8.6 billion of assets in January, compared with a loss of $6.26 billion the previous year, the Investment Company Institute said.
"They have a focus on the products and results that are sellable," said Ed Hipp, the president of brokerages at Centura Banks Inc. of Rocky Mount, N.C. Van Kampen's Emerging Markets Fund, for example, had a one-year return of 101.44% as of Dec. 31.
But Van Kampen faces stiff competition in the bank channel. It's up against entrenched leaders such as Putnam Investments of Boston, which sold $9.1 billion of mutual funds through banks last year, and Aim Management Group of Houston, which ranked second, with $4.4 billion of fund sales through banks. Franklin Templeton Group of San Mateo, Calif., Fidelity Investments of Boston, and Massachusetts Financial Services of Boston rounded out the top five.
But with $2 billion in fund sales through bank brokerages in 1999, Van Kampen is in the top 10 sellers through banks. And the company is on track to increase that business by 20% to $2.4 billion this year, Mr. Heffington said.
Mr. Heffington said Van Kampen has seen its business through banks grow since it retooled the channel two years ago. The fund company's bank coverage had suffered because its field wholesalers were also responsible for marketing from the home office, diverting their attention from selling, Mr. Heffington said.
That has since changed and Van Kampen has 22 field wholesalers covering the bank channel. It also has eight account managers, up from five in early 1999 and two in 1998. In 1998, Van Kampen also formed a group responsible for increasing broker productivity, without pushing particular products. That initiative has also helped boost sales, Mr. Heffington said.
Separately, Mr. Heffington said Van Kampen plans to launch additional funds this year. On April 3, it will roll out a California tax-free bond fund. A focused equity fund is also in the works, he said.
