RETAIL IS IN BOSTON PARTNERS’ FUTURE: WITH ABOUT 9% OF THE INSTITUTIONAL MARKET, NOW THEY’RE GOING TO TARGET ADVISERS

Boston Partners Asset Management, which has cut its teeth managing institutional money, is intensifying its efforts to crack the competitive mutual fund market.

The firm, which was formed less than three years ago by a group of former Boston Co. Asset Management professionals and has already amassed $13.5 billion in assets under management, recently launched its third no-load mutual fund. Over the next 12 months, it also expects to unveil its first advertising campaign aimed at making its name known to financial advisers.

“There’s a lot of mediocrity out there,” says Mark Donovan, who co-manages the Boston Partners Large Cap Value fund. “The retail business may be very crowded and fragmented, but we think we’re very good at what we do and bring a lot to the table.”

Still, there are those who question the seriousness of Boston Partners’ retail efforts. “They are not very marketing oriented,” says Michael Lipper, president of New York-based Lipper Analytical Services Inc., a leading mutual fund consultant. “They haven’t made any effort to provide us with any of their data. They’ve never even called us.”

Indeed, Boston Partners is primarily an institutional firm. Of its $13.5 billion in assets, only about $2 million is retail money. All told, the company has about a 9% share of the $150 billion-asset U.S. institutional fund market, according to Financial Research Corp., which is based in Boston.

no sudden moves

Michael Jones, Boston Partners’ chief operating officer, concedes his firm has relied mainly on word-of-mouth advertising to promote its mutual funds. The numbers bear him out. Boston Partner’s Large Cap Value Fund, for example, has pulled in $39.6 million in assets in little more than a year. But only about $852,000 of those assets come from retail clients.

“We don’t expect to gain overnight success in the retail business,” says Mr. Jones. “We just don’t have the kind of brand recognition that’s required.”

one at a time

Another obstacle, says Mr. Jones, is the fact that none of Boston Partners’ mutual funds has the three-year track re-cord required by most rating services.

But none of that has kept Boston Partners from pushing ahead with its plans to pursue consumers. Last month, the firm unveiled its first bond fund, bringing to three the number of mutual funds it peddles. In addition to the Boston Partners Large Cap Value Fund, the firm offers the Mid Cap Value Fund, which was opened last July and has $27.9 million in assets.

Boston Partners distributes its funds through Counselors Securities Inc., a subsidiary of Warburg Pincus. & Co. Inc. Increasingly, shares are being sold through the supermarkets of Charles Schwab & Co., Jack White & Co. and Fidelity Investments.

With no new retail products headed to the market, the 82-employee firm is turning its attention toward marketing its existing product line, says Mr. Jones. In the year ahead, it plans to start advertising in several trade journals. “The campaign will be aimed at further familiarizing people with Boston Partners,” says Mr. Jones, who says it is too early to estimate how much money will be spent on the effort.

In addition to growing the U.S.-based mutual funds, Boston Partners is adding to its institutional offerings. The firm picked up an impressive $2.7 billion in net new business last year, a 160% increase over the year before, according to InvestmentNews sister publication Pensions & Investments.

This summer, it plans to launch a market-neutral fund that will simultaneously take long positions in stocks managers deem to be undervalued while shorting stocks that appear to be overvalued.