They may be overshadowed by such East Coast giants as Fidelity and Putnam, but mutual fund companies west of the Mississippi are by no means sitting out the funds boom at banks.

Independent load-fund companies in the West are not only turning up their heat in thir home markets but increasingly are looking to banks in the East.

Though not as dramatic as, say, Billy the Kid riding cast with guns ablaze, there is plenty of action. As a result, bankers across the country can expect to find more western fund representatives on their doorsteps in the near future.

A spot check by the American Banker turned up seven major no-load fund companies in the West that either have increased banks sales over the past year or are about to start banks sales operations.

Powerful Bank Partners

The companies are: Pilgrim Management Corp., Los Angeles; GT Capital Management, San Francisco; Voyageur Funds Managers and IDS Financial Corp., both of Minneapolis; AIM Advisors Inc., TransAmerica Fund Management and American Capital Management, all of Houston.

Unquestionably, these and other load managers in the West figure to be powerful partners as banks push further and further into sales of mutual funds.

Of the $1.9 trillion invested in mutual funds, approximately $1.1 trillion are in funds that are loaded, or have some kind of sales charge. Of that amount, $265 billion is managed by investment advisors located west of the Mississippi River, according to Lipper Analytical Services Inc.

Because there is little incentive for banks to sell funds that don't pay commissions -- no-loads -- banks look to funds that pay a sales charge to them and their brokers.

Some western load fund families -- such as Franklin Funds Group in San Mateo, Ca., and GNA Capital Management Inc. in Seattle -- have long been leaders in the bank mutual funds arena.

These companies are now expanding their geographic reach. For example, Franklin plans to increase its presence in the Southeast by adding a fulltime wholesale salesperson there.

Plans are for an internal promotion. It was supposed to happen this fall but has been pushed to January, company officials said.

Other companies, such as Voyageur, are starting up banks sales efforts for the first time. Voyageur has promoted a wholesaler, Bruce Van Ornum, to head a new bank sales division, the company confirmed. Van Ornum lives in Arizona and is relocating to Minnesota.

Not surprisingly, the western companies are still at their strongest in their home markets, where their names are well known among bankers and consumers.

For example, TransAmerica's namesake funds sell better in banks on the West Coast, said Michael Maher, a spokesman for Portland-based Marketing One, a third-party marketer of mutual funds for banks.

TransAmerica is well-known on the West Coast for its insurance, annuity and fund products -- not to mention the spire of its distinctive headquarters in San Francisco.

"The TransAmerica, name recognition in California is marvelous and as a result, TransAmerica makes the short list in banks there very often," Mr. Maher said.

"When choosing a fund," he said, "banks base their decisions on a number of factors. Are they regional? Do they have a reputation?"

Carrol McGinnis, executive vice president in charge of bank sales at TransAmerica, said 60% of the fund's sales are on the West Coast. Mr. McGinnis cites the "stronger brand identity" there.

"We sell in the East but on a relative basis, we're not as strong in the East. The name recognition factor is an important one," Mr. McGinnis said.

Recent Effort

Transamerica's Eastern effort is a recent one. Wholesalers -- professionals who provide the important informational and training support for banks were added in New York and Florida three months ago.

Mr. McGinnis said the company's eastern reception has been positive.

"The interest is just beginning to gain momentum," he said.

David Sanderford, senior vice president of Seattle-based GNA, agrees that many western fund families are now turning their attention to the East.

"Just because you have big players in the East, doesn't mean you can't have someone's who's smart and effective come in there and do well," he said. Mr. Sanderford believes that while interest rates are low, load mutual funds that sell through banks "want to ride the wave of sales as long and hard as they can."

What follows is a rundown of the bank plans at major fund companies in three of the more active states west of the Mississippi.


With $73 billion in assets under management and a concentrated bank selling effort, San Mateo-based Franklin Advisors is a true industry leader. With a big offering of bond funds, Franklin is a natural for banks.

Capital Research & Management Co., Los Angeles, is also large -- $86.5 billion -- and sells well through banks, according to third-party marketers. The company, however, does not disclose whether it has a bank-dedicated wholesale effort. A spokesman did not return telephone calls.

San Francisco's GT Global Capital Management has eight wholesalers working with banks nationwide. In mid-June, GT opened a sales office in Michigan to cover the Great Lakes area.

"This is a very recent effort by GT Global, a little over a year old. It's very new to the country," said senior vice president Ray Cunningham.

GT, a $5.75 billion fund family, specializes in international funds, an area that banks traditionally do not feel comfortable managing for themselves. Already, bank sales account for 8% of the GT's total.

Pilgrim, in Los Angeles, has nearly $2 billion in its namesake funds. There is a bank sales manager -- Jim Ash -- but Pilgrim's 16 wholesalers handle banks in addition to other financial institutions, broker-dealers and financial planners. Despite not having a dedicated division, Pilgrim sells 20% of its funds through banks, a spokesman said.


Houston fund companies are very interested in banks. AIM Advisors, for example, has created a bank division by hiring Mike Vessels away from Putnam. AIM, mostly known for equity fund management, has made huge leaps in popularity according to a survey by Alliance Capital Management.

Meanwhile, a spokeswoman for American Capital Asset Management -- a $12.3 billion fund family -- said the bank sales department has increased by two to seven total during the past year. Peter Harvey is the national bank sales manager. The spokeswoman said the bank effort has been expanding nationally, especially in the East.


Both Voyaguer and IDS are casting their eye to the bank channel.

Voyageur, a bond fund specialist with $1.9 billion under management, is creating a bank sales effort and IDS has a pilot program in two First Bank System branches where IDS financial planners have offices in the branches. If successful, IDS plans a system-wide effort.

Despite such campaigns, two load fund families west of the Mississippi have no bank sales efforts: Santa Fe-based Selected/Venture ($1.9 billion assets) and Insight Investment Management Inc., which manages the $1.2 billion Great Hall funds.

An Insight official said the company did not market directly to banks, but "that doesn't mean we don't want to or don't sell through banks." And Louis Proyect, an official with Selected/Venture Advisors L.P., said, "We just haven't actively pursued that market yet. Yes, we would be interested."

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