Ex-Wachovia gurus roll out first mutual funds at Riverfront

Riverfront Investment Group LLC, the Richmond, Va.-based asset manager founded by former investment gurus from Wachovia Securities, is launching three mutual funds. The rollout, announced yesterday, is Riverfront's first foray into mutual funds. The firm will offer three portfolios with differing equity/fixed income allocations: the Riverfront Moderate Growth Fund (80/20), a Moderate Growth and Income Fund (50/50), and the Long-Term Growth and Income Fund (70/30). The funds follow the same strategies used in Riverfront's separately managed accounts business, where it runs about $2 billion, said Pete Quinn, chief operating officer. "We follow a long-term strategic allocation based on the value we see in asset classes [combined] with a tactical strategy based on momentum," he said. The firm is currently overweight in emerging markets and high-quality, dividend-paying U.S. equities, Mr. Quinn said. Riverfront was formed in April 2008 by former Wachovia chief investment officer Michael Jones, former chief investment strategist Rod Smyth, former chief equity strategist Doug Sandler, and Mr. Quinn, who ran the retail operations at Wachovia. The former Wachovia investment professionals retained their same functions at Riverfront. The men left Wachovia after it merged with A.G. Edwards, with surviving Wachovia personnel relocated to the merged firm's St. Louis headquarters. About a dozen brokerage firms use Riverfront in SMA programs, including Morgan Stanley Smith Barney, Raymond James Financial Inc., Robert W. Baird & Co. Inc., and RBC Wealth Management. Wells Fargo Advisors, which includes the former Wachovia Securities operation, has yet to become a client of Riverfront's. Mr. Quinn denied any bad blood between Riverfront and Wells Fargo/Wachovia. Taking time to approve managers "is just part of their process," he said. "We have a lot of friends over there" at Wells Fargo, Mr. Quinn added. Riverfront is subadvising the new funds. ALPS Advisors Inc. is adviser and handling administrative functions, with ALPS Distributors Inc. in charge of sales.