Fast Track: New Principal exec eyes subadvisory gigs

Principal Financial Group Inc. has a relatively low profile for a company managing $100 billion of assets – predominantly in retirement plans. Doug Younkin hopes to change that.

The former national sales manager of Credit Suisse First Boston Corp. of New York was hired to a newly created position to sell the Des Moines, Iowa-based insurer’s asset management services to companies that focus on retail investors.

His mission as managing director of third-party distribution is to get subadvisory gigs for Principal’s team of portfolio managers.

Mr. Younkin, who began working for Principal May 12 out of an office in San Clemente, Calif., says he has already been swamped with requests for proposals from companies that manage retail money. “They say, `You guys at Principal really are strong with real estate,”‘ he says. “I’m here to make them aware of who we are and let them know we are available.”

Principal is the world’s 42nd-largest institutional asset manager, according to a 2002 survey by sister publication Pensions & Investments.

The real estate unit is the world’s sixth-largest such manager. Principal is also one of the nation’s largest managers of preferred securities.

brand cachet

Mr. Younkin, 44, sees a major opportunity for the company to start managing separate accounts for broker-dealers.

He also believes his firm can garner many contracts managing mutual funds and closed-end funds for mutual fund companies.

Mr. Younkin says Principal’s success is rooted in the cachet its brand name carries with broker-dealers.

“I know a lot of people in the industry, but Principal is known by broker-dealers so that doors are already open,” he says. “It’s just a question of prioritizing the direction I take.”

One of the certified public accountant’s strengths is developing products. Special orders don’t upset him. “We can slice and dice our investment capabilities for third-party business,” he says.

“If they need a combo of fixed income and real estate, we can do it,” adds Principal spokeswoman Terri Shell.

Mr. Younkin’s arrival at Principal also results from his established relationship with Jim McCaugan, president and chief executive of Des Moines-based Principal Global Investors.

Mr. McCaugan, who keeps offices in New York and Des Moines, previously was First Boston’s CEO for the Americas.

“He’s very experienced working with other people’s distribution,” Dick Hibbs, executive director of institutional sales and marketing for Principal Global Investors, says of Mr. Younkin.

“There was a strong comfort level, and he has experience with our CEO working for a previous employer.”

Still, Mr. Hibbs notes, what Mr. Younkin has been put in charge of selling is in some respects a work in progress.

“You have to have an external team and an internal team,” Mr. Hibbs says. “We have a lot of those capabilities, but they’ll be more refined as we go along,” he adds.

The refining process includes the training of staff members to be more specialized in dealing with retail investing, and bolstering that staff.

There’s a big trend toward institutional firms looking to grab a slice of the wealthy individual’s asset pie, but Mr. Younkin says it’s not crowded at the top.

“When something’s brought to their attention that’s better, they’re always willing to listen,” he says.