RiverSource Investments of Minneapolis, a wholly-owned subsidiary of Ameriprise Financial, is shining a brighter light on its international subadvisory affiliate, Threadneedle International Limited, headquartered in London.
To pave the way for Threadneedle to be recognized and build its brand in the U.S., RiverSource recently relinquished its own brand on four of its international mutual funds which have now been rebranded under the Threadneedle name. Threadneedle has been subadvising all of the funds as well as two variable annuity portfolios for RiverSource. Two additional mutual funds will be launched later this year under Threadneedle's name and day-to-day management.
The rebranded mutual funds include an emerging markets fund, European equity fund, global equity fund and an international opportunities fund. All told, Threadneedle subadvises more than $4.1 billion in assets for RiverSource as of Feb. 29, 2008.
Threadneedle was founded in 1994 through the combination of two investment operations, was acquired by Zurich Financial Services Group in 1997 and then reacquired in 2003 for $565 million by the American Express Financial Corporation, the predecessor company to Ameriprise. Four and a half years later, the timing is right for Threadneedle to be recognized in the US as a true and distinct RiverSource partner with international investment management expertise.
"When we became part of American Express back in 2003 we were building our presence in Europe, but we've always wanted to do more in the U.S.," said William Lowndes, head of US distribution for Threadneedle. Lowndes joined Threadneedle in 1998. "The time is right now. We think the US is an incredibly important market and we have a seven- to 10-year plan here. The intent (now) is to bring the brand more clearly into the U.S."
"We feel that it's a great opportunity to leverage the Threadneedle name and expertise," said Ryan Lund, a RiverSource spokesman. "They are unknown here in the U.S.," he added.
Its global growth included expanding into Austria and Germany in 1998, Switzerland in 2002, France in 2003, the Nordic region in 2005, the Dutch market in 2006 and Spain in 2007.
Back in 2003, Threadneedle collectively managed $80.4 billion. But assets under management have grown to more than $137 billion now for a variety of clients including institutional customers such as pensions, corporations and insurance companies. It also manages hedge funds under the Crescendo label.
Threadneedle does not directly manage nor subadvise any U.S. mutual funds other than those for RiverSource. "The RiverSource mutual funds are the only way to access us in the U.S.," Lowndes added.
The Threadneedle mutual funds are distributed through Ameriprise Financial's network of 10,000 financial advisors and registered representatives. To be sure Threadneedle's value is understood, plans are currently underway to have meetings and conference calls with advisors, and issue white papers beginning this summer, confirmed RiverSource spokesman Lund. The firm is also considering a potential print advertising campaign, he added.
While Threadneedle is happy to emerge from RiverSource's shadow, it has no plans to build a physical investment management presence in the U.S. "For 12 years we've always had money managed from London," Lowndes said. "It was never our intent to put managers in the U.S."
Threadneedle sells to customers in 15 countries and currently has 600-plus staff members across nine offices in its UK home base as well as in Austria, Denmark, France, Germany, the Netherlands, Spain, Sweden and Switzerland.
Threadneedle executives see the RiverSource brand as being complimentary to its own international focus, and opportunities exist for Threadneedle to help RiverSource expand and build out its presence in regions such as Europe, Asia and the Middle East, Lowndes said.
RiverSource has been busy tidying up its own mutual fund lineup. Just last month, after winning shareholder approval in January, the firm merged seven retail funds into five other RiverSource funds in order to shore up its offerings.
In addition, this past October three new funds were added to the group as part of an expansion effort and in recognition of the growing desire for alternative, alpha-generating funds for more affluent investors. They included a 120/20 contrarian equity fund, a 130/30 U.S. equity fund and an absolute return currency and income fund. Each of the fund's minimum investments is $10,000.
RiverSource has focused on building its boutique investment management structure that includes showcasing Threadneedle as its global investment management tem. But it sports disciplined equity as well as asset allocation teams in its Cambridge, Mass. offices, a large cap equity team in Boston, a collateralized debt obligation team in Los Angeles, and both a contrarian equity team and fixed-income team in its Minneapolis headquarters.
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