Jude T. Driscoll is the newly knighted president and chief executive officer of Delaware Investments and Lincoln National Investments, both of which are the investment management subsidiaries of Lincoln Financial Group of Philadelphia. Lincoln National Corp., in turn, is the ultimate owner of Lincoln Financial
Delaware manages $87 billion within its 64 proprietary open and closed-end mutual funds, retirement plan services, college savings plans, managed accounts and other retail investment products.
Driscoll assumed the top job in January, after being appointed interim CEO in October 2002 when Charles Haldeman stepped down from the position as chief executive officer. Driscoll, who joined Delaware in August of 2000 as executive vice president and head of fixed-income, was part of a "lift-out" of 20 fixed-income managers from Conseco Capital Management of Carmel, Ind.
At Conseco, Driscoll served as a senior vice president of the fixed-income group and director of investment processes.
Driscoll recently spoke one-on-one with Mutual Fund Market News Editor-at-Large Lori Pizzani about Delaware's strategic plans under the new guard.
MFMN: What's your No. 1 mission for Delaware?
Driscoll: To keep Delaware's performance momentum going. Performance will always be my No. 1 goal. In my view, performance across a focused line of business, combined with great client service, will build a stronger line of business that will last longer.
That's what I wake up with in the morning and go to bed with at night: performance.
We can put up competitive performance. I'd like to be competing with five to 10 large money managers.
MFMN: What do you most want to accomplish in your first 100 days in office?
Driscoll: I want to keep everyone focused. We will look at where our strengths are, then focus everyone's attention on working on those things that will pay us dividends for the year. I need to let everyone know that we need to keep pushing and driving.
MFMN: What personal strengths do you bring to the corner office at Delaware?
Driscoll: In the money management field, I have been a portfolio manager under the gun. Other managers and people in the marketplace understand this experience I bring. I've been around, and after 25 years of experience, I understand the managers' needs and the customers' needs.
I am also a team player and builder by nature. I was part of the Conseco team that came to Delaware in 2000.
MFMN: Are there other benefits of a company having a true investment manager, as opposed to a lawyer or marketing executive, at the helm?
Driscoll: Having investment managers running the firm is important. It allows you to focus on the market, what you are really doing and where you are going.
Those with marketers running the firm have pushed toward the trendy side of the money management business that saw everyone chasing growth in the 90s.
We want to stick to our discipline. I think you lose a bit of that with a marketing professional running a firm.
MFMN: Delaware has been in a multi-year turnaround, begun by your predecessor. Has the company completed its turnaround?
Driscoll: No, but we are making very good progress. Our performance numbers are good, and we've done a good job of controlling expenses. But our turnaround isn't complete yet.
We can still better our performance. As far as goals, we are working to have our mutual funds in the top half of their peer groups, and none in the bottom quartile. Right now, 19 of our 25 mutual funds are in the top half of their peer groups year to date. I'd like that to push up over 20.
MFMN: Does that mean you will hire new talent?
Driscoll: No, we are not actively seeking new talent right now. The talent we have now is very good. We feel pretty good about the teams we have in place. Our people know how to outperform, and our goal is to have 100% of our funds outperform. Morale is high and people feel good about what they're doing.
MFMN: What other initiatives are planned?
Driscoll: We also will be streamlining our funds, which will involve offering fewer funds but which will allow us to focus on our better offerings.
I want to be focused on what we are good at, our centers of expertise. We are good at value equities and excellent at growth equities. We are a top manager in international equities and have expertise in fixed income, especially since we manage the fixed-income assets of our parent company, Lincoln.
We also have to get the Delaware story out there - and get it told, particularly to intermediaries. We will do that by working closely with the 232 Lincoln wholesalers, many of who sell various products but haven't focused on Delaware's funds. When you have a good value story to tell it's easier and allows you to build on your three-, five- and 10-year performance.
MFMN: Was 2002 a year of success or struggle at Delaware?
Driscoll: Three components contributed to our success in reaping $2.9 billion in net inflows overall.
That's the first time in 13 years that inflows have been positive. In the prior 12 years, there was a lot of instability. Performance was shaky, but the turnaround stabilized the organization. We focused our managers on performance, partly due to performance incentives we put into place three years ago.
MFMN: What are the three components you mentioned that contributed to last year's success?
Driscoll: We saw very strong growth in managed accounts, which attracted about $800 million, and in international equities. We feel we can continue to make headway in managed accounts in 2003.
We also saw success in our 401(k) products because we created some alliances such as getting onto the 401(k) platforms at Legg Mason and Merrill Lynch. Expansion is possible if you have timely and attractive products. The 401(k) business saw inflows of $500 million.
We will continue to focus on distribution and alliances, especially in best-of-breed mutual fund platforms.
Our company also saw growth in the institutional business, with net inflows of about $3 billion.
MFMN: Will the continuing difficult market environment help or hamper your efforts?
Driscoll: This market environment is not going to help anybody. But we can separate ourselves from the pack by taking care of clients and providing top client service, and help them with what's going on.
Consistency is vital. We want to make sure that we are delivering on everything that brought them in the door.
MFMN: Where do you envision Delaware Investments being five years from now?
Driscoll: I see Delaware as a major competitor in the money management business, with an impeccable reputation for putting out performance. Delaware has the resources to compete.
MFMN: What do you like most about your job?
Driscoll: My favorite part of the job is when the fixed-income managers come in and ask my thoughts on putting something into a portfolio. It makes me feel good to talk about the market with them, and I enjoy that.
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