As Waddell & Reed celebrates its 70th year, it held a press conference in New York Thursday to give its perspective on its standing.
While there’s long been talk of the separation of manufacturing and selling products, Waddell is content handling both, Reuters reports. With $54 billion of assets and management and a focus on middle-income clients, the firm is also comfortable with its niche.
The strategies are apparently working, for Waddell is solidly profitable.
“Because of our distribution capability, as long as that distribution system is healthy, we have a defensible niche in the business,” Waddell Chief Executive Officer Hank Herrmann said. “We’re growing at a pretty good rate, too, and we’re highly profitable.”
One of the driving factors, Herrmann said, was the acquisition of the Ivy Funds in 2003, which added wholesalers reaching broker/dealers to the firm for the first time. Previously, the firm sold directly to investors through a sales force of 2,4000 advisers.
“We’re growing faster now than we’ve grown for many, many years as a result of going into [the wholesale] channel,” the CEO said.
In addition, the company is going to upgrade desktops for its advisers, and has signed a letter of intent with Pershing.
Asked whether private equity firms have been looking into acquiring Waddell, Herrmann said the firm would entertain serious offers.
“There are scale issues that challenge us. If the right kind of strategic player comes along and the price is compelling, you’ve got to show it to the board,” he said.
The staff of Money Management Executive ("MME") has prepared these capsule summaries based on reports published by the news sources to which they are attributed. Those news sources are not associated with MME, and have not prepared, sponsored, endorsed, or approved these summaries.