The debate rages on among fund managers regarding the merits of active versus passive management, especially in light of the growing buzz for low-fee passive funds.

But one Midwest mutual fund shop, Scout Investments, is sticking to its guns with actively managed products.

The firm, headed by CEO Andy Iseman, announced less than two months ago that it has surpassed $25 billion in assets under management. That is up from around $20 billion in assets in 2011. Iseman remains "prudent" in his approach to growth and development in 2013 and is emphasizing the importance of milking what works.

Describe your performance leading up to this year.

We just passed $25 billion. It's a nice milestone that recognizes both organic and inorganic growth. We've had good organic growth and nice flows over the past two or three years.

We're starting off this year quite strong, and we like our prospects going forward on both the equity and fixed income sides. We had in excess of $800 million in flows last year, and we see the opportunity there to have pretty significant organic growth again on the fund side in 2013.

Our goal is to continue to grow out the channels that we have historically played in the intermediary space: registered investment advisors, trust departments, no-transaction-fee platforms, and other broker-dealers. We're also making a concerted effort to go after the institutional space. We feel like we have compelling strategies in equity and fixed income. At this point, we will explore the potential for new strategies, but we're more focused on getting the word out about our existing strategies.

What are some larger mutual fund trends that Scout looks to take advantage of?

There's a cognizance that there continues to be very cheap data in the marketplace through the use of index funds and active and passive ETFs. The strategies that are going to be compelling are those where you can certainly differentiate yourself and exhibit a track record of delivering alpha.

Regardless of whether associated fees are expensive or inexpensive, and regardless of passive versus active management or mutual funds versus ETFs, at the end of the day you have to deliver the alpha for investors. I think there's a much greater focus on that today. So our strategies that we're trying to leverage are those where we feel you have to have active management in order to bring that to bear.

What's also notable is there's an appetite in fixed income to do something nontraditional. We're well positioned for this with the Unconstrained Fixed Income product by Reams, in light of the continued state of a low interest rate environment.

You mentioned an effort to target the institutions. What's your approach?

The traditional institutional sponsors: defined benefits, endowments, foundations, and most importantly the consultants, the top, second and third tier consultants that act as the gatekeepers and the advisory component for those plan sponsors.

Our new head of institutional distribution and client service, Toby Cromwell, brings a number of those relationships to the table, and we're really trying to leverage off that.

How big is your current sales team, and are you looking to add members?

On the intermediary, mutual fund sales side, we have three external wholesalers and three internal wholesalers under Lance Peterson, who heads up the intermediary effort. Meanwhile on the institutional side, we have three external wholesalers and one individual focusing on subadvised defined contribution, plus one internal support person.

We have senior staff with very good relationships, and we're going to add to that staff. Over time, I could see us continuing to support that effort, whether by adding one or two people in the field or augmenting the team with internal sales staff. I want to grow this business in a very prudent manner. This isn't about putting multiple bodies out in the field; it's more about getting the right folks who from a cultural standpoint understand the institutional space.

Over the course of the next six to nine months, I think we'll be adding a few folks to the institutional team.

Any territories you're looking to strengthen coverage in?

We currently cover roughly three territories with both the intermediary and institutional teams: East, Midwest and West. We are going to have a dedicated presence on the institutional side of the distribution team in the Northeast, i.e. New York, whereas traditionally it was covered by someone who wasn't located there. Beyond that would be a greater concerted effort on the Midwest - where the focus is in the upper Midwest, specifically Chicago - and taking advantage of a lot of the entities that are there, whether consultants or plan sponsors.

What are the main takeaways in terms of your vision for Scout going forward?

We're not trying to be all things to all people. We're trying to reinforce the message for our existing strategies. We will continue to take a look at growth opportunities on an internal or external basis as they present themselves.

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