Denver-based Transamerica IDEX Mutual Funds group has shortened its name to Transamerica Funds, as it now resides within the larger Transamerica Asset Management Group, under insurance company parent Aegon. Plans are underway to identify and potentially merge redundant or overlapping funds, expand distribution efforts, craft retirement income-based solutions, strengthen the Transamerica brand and build the firm into a future top-tier investment group.
For Transamerica, the transformation began in 2006 when the group closed several of its funds to new investors and reconfigured some into new asset allocation fund-of-funds with Morningstar Associates as the portfolio allocation manager. The fund-of-funds use multiple firms as the underlying day-to-day managers. That multi-manager approach has been a staple discipline of Transamerica's mutual funds since their debut 22 years ago.
Transamerica also provides a lineup of 43 other funds under the Transamerica Investment Management Series, many of which are managed by, and co-branded with, high profile subadvisors including BlackRock Investment Management, the Morgan Stanley unit Van Kampen, as well as Marsico Capital Management, Templeton Investment Counsel and others.
The impetus for shortening Transamerica's name was a desire to take advantage of the Transamerica brand name in general, said President and CEO John Carter. The former Transamerica IDEX moniker came about historically through a series of changes, but the plans had always been to shorten it further, he noted. The new, simpler moniker allows the fund group to nestle in alongside other Transamerica-branded capabilities including broader asset management and separate account management.
Transamerica Asset Management, the unit Carter now presides over, took over the oversight and administration of the Transamerica Funds. That unit now has about $50 billion under management and includes a total of about 150 retirement funds, life policy and annuity sub-accounts. Previously, not all Aegon funds were together in one group.
Now that everything is under one structure, the firm can become more efficient and more competitive, Carter said. "We want to build a first-class asset management company that meets investors' needs wherever they are, with a strong brand name, high performance and low-cost funds."
Focusing on Distribution, Funds, Solutions
Going forward, Transamerica wants to promote the "power of two," said Mike Petko, executive vice president and national sales manager with Transamerica Investments, an operating division of Transamerica's wholesaling broker/dealer, which distributes the company's mutual fund and managed account services, as well as variable and fixed annuities and life insurance. The firm has seen success with its six Morningstar asset allocation portfolios. But it also wants to promote the firm's in-house managers that now manage a variety of assets. "We've refocused our sales force on both," Petko said.
That sales force currently includes 41 external wholesalers paired up with 35 internal salespeople. Of the external staff, 16 are focused on the bank channel, while 25 hone their efforts to the national broker/dealer channel, which includes wirehouses and broker/dealers. Independent firms are going to become a more important focus as well, Petko hinted without providing details.
Right now, Carter's focus is fixed on assessing where mutual fund redundancies lie and making changes.
"We are analyzing all funds, their managers, their rankings, etc.," he said. The key is to make changes without upsetting your fund investors or the advisors who put them in the funds with good reason, he added.
Transamerica, like many of their competitors, is working toward building and launching solutions to meet the approaching retirement income needs of the masses. "Inside Aegon Transamerica we have lots of experts who focus on different pieces of this," Carter said. "We will tap into different channels to help us come up with all-encompassing solutions."
In a related story, in a filing with the Securities and Exchange Commission last week, Trusco Capital Management of Atlanta, the investment advisory arm of SunTrust Bank, revealed it was restructuring and plans to re-brand both its investment advisory arm and the STI Classic Funds group under the name RidgeWorth. According to the filing, SunTrust's fund management firm, soon to become RidgeWorth Capital Management, recently created new, wholly-owned subsidiaries staffed by current portfolio managers.
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