The Reserve Funds, the company that launched the first money market fund, hired four executives Thursday to increase its sales through banks.
Eric Lansky, a senior vice president of Reserve, said 20% of its $30 billion of assets under management are currently held in banks. With the four hirings and some new products, it is ready to make a serious effort to expand its bank business, he said.
"Previously, the banking community was leading us and telling us where we were needed in the market, but with these hirings and the experience we have developed, we think it is time to become more proactive with banks," he said.
The New York fund company, which has managed both money and equity funds since it opened in 1970, began pursuing bank distribution in 2000 when it launched its Reserve Cash Sweep product.
The product, which now has $800 million of assets under management, has attracted 12 new relationships this year, and its asset have grown 21% since the beginning of the year. Mr. Lansky said it is attractive to banks because it lets them move assets from money market funds to sweep accounts.
Besides the cash sweep product, Reserve has more than $6 billion of assets from banks in other products. Those assets have increased more than $2 billion this year.
Reserve is working on developing additional products for the bank channel, he said. "We aren't just going to create a product and push it in the market. We want to work with banks and find out what they are seeking. We feel we really only have a small amount of penetration. There is a lot of opportunity here for us."
It currently has relationships with 75 banks, Mr. Lansky said. The ideal bank partner is small or midsize and has between $500 million and $5 billion of assets, he said.
To increase sales through banks, Reserve hired Laura Fitzgerald, David W. Keebler, Eric Lane, and William H. Zimmerling as consultative sales professionals. In the newly created positions, they will be in charge of developing banking relationships in specific regions of the country.
Ms. Fitzgerald, who was a business development officer at Promontory Interfinancial Network Inc. in Chicago, will be based in Chicago and will oversee the Midwest. Before joining Promontory, she had been a senior account executive at SEI Investments Co., also in Chicago.
Mr. Keebler will be based in Pennsylvania and will oversee the Middle Atlantic states. Before joining Reserve, he was a marketing representative in cash management at Federated Investors Inc. in Pittsburgh.
Mr. Lane will oversee the Southwest from an office in Houston. He was an external wholesaler with AIM Investments in Houston.
Mr. Zimmerling will be the vice president of deposit bank relationship management and will work with banks in the West from an office in Denver. He was previously the chief operating officer and an executive vice president for Legent Bank and Trust Co. in Denver.
Reserve intends to continue to hire aggressively, Mr. Lansky said. Over the next six to 12 months it plans to hire 15 sales executives nationwide to develop business through banks.
Mr. Lansky also said he is confident that his firm will continue to develop assets through the bank channel over the next five years.
Now is the right time for this growth, because we have nice penetration and we understand more than we knew two years ago. Now we can offer more to the banking community," he said.
