Sometimes it's better not to be a pioneer.

That's a lesson that Pioneer Group Inc., the Boston investment and mutual fund company, has learned the hard way.

After losing a chunk of money in overseas ventures-a gold mine in Ghana, a timber operation in Siberia, and a bank in Moscow-the 70-year-old company is retrenching, reorganizing, and refocusing on its core money management business.

Pioneer's chairman, John F. Cogan Jr., says the company is set for a turnaround, having taken measures such as consolidating its approximately 20 far-flung businesses under three units and putting that gold mine up for sale.

"These steps will allow us to realize value, reduce our debt, and achieve a more consistent earnings stream," he said in a response to written questions. "I believe these actions will also contribute to our emergence as a stronger, more profitable company with a sharper strategic focus."

Mr. Cogan declined to say whether he thought Pioneer, which has long taken pride in its entrepreneurial bent, had strayed too far from its core business. But the company's financials indicate the road was rough.

Through the first nine months of 1998, the company lost $23.3 million. It expects another loss in the fourth quarter. Virtually all the losses have been due to setbacks overseas.

One measure of the problem is that for the first time since going public in 1979, Pioneer in the second quarter suspended its dividend, when it declared its first-ever loss. It repeated that precedent in the third quarter.

Though Pioneer's domestic fund business remains strong, it is not invulnerable, observers say.

Losses from overseas could hamper the company's ability to add products and expand distribution-something Pioneer's bigger competitors can do more easily by virtue of their deeper pockets.

In addition, rivals are sure to call attention to Pioneer's seeming investment imprudence, said Louis Harvey, president of Dalbar, a Boston consulting firm.

"It's a competitive disadvantage," he said.

Industry watchers say Pioneer's woes are partially due to bad luck and partially to bad bets. The company lost millions on its majority stake in a Moscow bank after the latter's management made a string of unauthorized loans backed by risky securities.

Pioneer's natural-resources businesses have been hurt by forces beyond its control: Economic troubles in Japan and Korea have torpedoed the market for the timber Pioneer harvests in Siberia, and a drought in Ghana recently reduced the power supply to Pioneer's mining operation there.

Pioneer could have eased its burden by having partners to share expenses when the projects ran into trouble, said Michael S. Beall, an analyst at Davenport & Co., a Richmond, Va., brokerage firm.

Mr. Cogan "has a lot of foresight, but he has held on to things too long and tried to take on more than the company really had the resources to do," Mr. Beall said.

The domestic fund business has not been immune to trouble, either.

Fund flows are strong-net sales through the first three quarters were $1.26 billion, about triple the figure for the same period a year earlier. And the mutual fund and institutional accounts business posted a profit of $10.8 million in the third quarter. But this includes a one-time, $8 million gain Pioneer realized from the sale of class B share rights.

The stock market's third-quarter slide cut into Pioneer's money management income. Assets under management fell by $3.5 billion in the quarter, leaving the firm with about $20 billion and a reduced base upon which to charge management fees.

Because of its heavy emphasis on equity assets-Pioneer has about $20 of equity assets for every $1 of fixed-income assets-it suffered more than most of its rivals.

According to Financial Research Corp. of Boston, the third-quarter stock market skid shaved 16% from Pioneer's mutual fund assets under management. That compared with 8% at Kemper Funds and 9% for the Fidelity Advisor funds, each of which has a broader bond component.

Pioneer executives contend that their emphasis on equity investing has been successful over the long run-but at the same time the company now has a goal of tripling or quadrupling its fixed-income assets under management.

To do that, it is considering cutting prices and is starting new funds. Kenneth J. Taubes, a former Putnam Investments executive, was hired in September to guide development of more aggressive bond funds such as a strategic income fund and a high-yield fund that the company plans to introduce by June.

"We'd like by May and June to roll out a whole new approach to fixed income," said David Tripple, president of Pioneer Investment Management, whose main business is managing and distributing domestic mutual funds.

There are other structural changes. This fall's streamlining into three business units, which included combining the marketing and money management components of Pioneer's U.S. money management business, should improve coordination and accountability.

Meanwhile, it will give Mr. Cogan "more time to concentrate on the strategic future of the company," said Pioneer spokesman Tim Frost.

Last month Pioneer brought on board a well-regarded chief financial officer in John A. Boynton, a former executive at Quaker Oats Co. He reports to Mr. Cogan and is expected to keep close tabs on the risk-and- return dimension of the company's investments.

And while it plans to stick with promising long-term businesses such as investment management in Poland and other countries, Pioneer is pulling back from riskier overseas ventures.

In addition to putting its gold mine on the block, it has gotten out of the Russian bank and is seeking partners for the timber operation.

Observers say the company has a strong core franchise to fall back on in its equity fund business, which is known for a disciplined, value-investing approach and consistent returns.

"They don't trim their sails every time the winds change," said Burton J. Greenwald, a mutual fund consultant in Philadelphia.

Among the standouts is the 70-year-old Pioneer Fund, which has had average annual returns of 21% over the past five years, placing it in the top 10% of growth and income funds, according to Lipper Inc.

Performance like that has helped Pioneer expand its sales network- insurance agents and independent financial planners until a few years ago- to include banks and brokerages.

"In the last five years or so they have moved from being a niche player to one that's much more aggressive," said Dalbar's Mr. Harvey.

Pioneer refused to break out its sales by channels, citing only a goal of 20% through each of its five channels. (See related article on preceding page.)

In the end, Pioneer should be successful thanks to its decision to stick closer to the businesses it knows best, said Mr. Beall, the Davenport analyst.

"I'm just real sorry they waited this long," he said.

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