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Rating:MainStay Signs Adoption Papers for a $750 Million Fund Family Not Rated 5.0 Email Routing List Email & Route  Print Print
Thursday, July 9, 2009

MainStay Signs Adoption Papers for a $750 Million Fund Family

by: Armie Margaret Lee

MainStay Investments is adopting four stock funds managed by Epoch Investment Partners, which collectively have more than $750 million of assets. The reorganization of the Epoch Global Equity Shareholder Yield, Epoch International Small Cap and Epoch US All Cap as MainStay Epoch funds is expected to take place in November.

Steve Fisher
MainStay Funds
"In this environment, with a strong parent, we're aggressively growing organically and inorganically," MainStay Funds president Steve Fisher told The MFWire.

The Epoch funds provide a "nice complement" to MainStay's large cap equity and fixed income product roster, Fisher said.

MainStay's Fund Deals Since 2005
  • 2005
    Adoption of the FMI Winslow Growth Fund (now MainStay Large Cap Growth)

  • 2006
    Acquisition of Institutional Capital Corporation

  • 2009
    Adoption of four Epoch funds

  • The deal deepens ties between MainStay and Epoch. Last week, as MainStay unveiled a host of changes to its fund lineup, it also announced that it tapped Epoch to sub-advise several of its mutual funds.

    The last time MainStay did an adoption was in 2005, when it took the FMI Winslow Growth Fund under its wing. A year later, MainStay acquired Institutional Capital Corporation, a deal that brought it three mutual funds.

    "We continue to keep our eyes and ears open for opportunities," Fisher said.

    At present, MainStay has 49 mutual funds, including three money market funds, four asset allocation funds and five retirement funds. The fund mergers announced last week, coupled with Thursday's adoption announcement, will bring the total number of funds to 46, according to MainStay spokesman John Puccio.

    Meanwhile, sales via MainStay's outside broker-dealer channel have more than tripled in less than five years, Fisher said.
    He attributed the growth to fund performance, MainStay's senior wholesaling model, and value-added marketing initiatives.

    MainStay implemented a new distribution strategy in 2004.
    Company Press Release

    NEW YORK, July 9 /PRNewswire/ -- MainStay Investments today announced the adoption of four equity mutual funds managed by Epoch Investment Partners, Inc. ("Epoch") to the MainStay Group of Funds. Pending shareholder approval, these funds with over $750 million in assets will be reorganized as "MainStay Epoch" mutual funds in November 2009. In addition, MainStay Investments will become the primary distributor of Separately Managed Accounts (SMAs) managed by Epoch.

    Three of the funds have four-star ratings from Morningstar: Epoch Global Equity Shareholder Yield (EPSYX), Epoch International Small Cap (EPIEX) and Epoch US All Cap Equity (EPACX).

    Founded in 2004 and led by CEO and co-CIO, William W. Priest, Epoch is a global, boutique asset management firm located in New York City. Their equity strategies are created in a manner consistent with the firm's investment philosophy - to seek businesses that produce significant "free cash flow" and are run by management teams that intelligently use their free cash flow to create shareholder value.

    "We're delighted to be adding the Epoch Funds to the MainStay family. Epoch's investment offerings are complementary to MainStay's strong Large Cap Equity and Fixed Income product line-up. In both investment style and product scope, MainStay is adding greater depth and breadth to its family of mutual funds," said Stephen Fisher, president of the MainStay Funds.

    New Sub-Advisory Relationships

    Today's announcement follows several other enhancements made to the MainStay lineup last week. Those changes include Epoch assuming management of several MainStay mutual funds as sub-advisor as well as the proposed consolidation of several other MainStay Funds to reduce overlap within the complex.

    Additionally, MainStay appointed industry veterans Robert DiMella and John Loffredo, who co-lead MacKay Shields' recently acquired municipal bond team, to manage the MainStay Tax Free Bond Fund (MTBAX).

    For over 15 years, DiMella and Loffredo have worked together in managing municipal bond portfolios. They founded Mariner Municipal Managers LLC in 2007 upon leaving BlackRock, where they served as co-heads of BlackRock's Municipal Portfolio Management Group, with assets under management in excess of $100 billion.

    "Municipal bonds are an investment staple for high net worth clients at or near retirement. The asset class is anticipated to play an even larger role for the growing retirement market in the years to come. We are pleased to have these two outstanding municipal bond managers at the helm of the MainStay Tax Free Bond Fund," said Fisher.

    MainStay Continues Growth

    In 2004, MainStay began strategic implementation of a new distribution strategy that has fueled the growth for the fund family. In less than five years, gross sales through MainStay's outside broker dealer channel have more than tripled. With strong relative performance in key asset categories and inflows driven by a highly effective distribution effort, MainStay ranks 15th based upon net flows among intermediary-sold mutual fund families(1) in the U.S. over the last 12 months.

    "The MainStay distribution approach is based on training and preparation, advisor segmentation and disciplined execution. Our sales professionals serve as an advisor to the advisor - a trusted and reliable resource to an advisor's business," said Christopher Parisi, managing director and head of National Sales for MainStay Investments. "We embarked on this strategy four years ago and we are seeing exceptional results because of this approach."

    Consistent with sales results, a recently released kasina research report ranked MainStay external wholesalers highest in availability and responsiveness and number two overall in the industry.

    "Our objective is to provide world class support for our top tier distribution partners by offering a robust product set to best meet the needs of our clients," concluded Fisher.

    About Mainstay Investments

    New York Life Investments is a top 25 global money manager(2) with over $233 billion in assets under management, with its affiliates, as of May 31, 2009. We deliver the investment products and expertise you've come to expect through: Multi-Boutique Management, offering access to leading institutional managers that drive performance; Proven Wealth-Building Tools, providing actionable and effective solutions to help invest and plan for all life stages; and a commitment to you. We proudly stand on a track record of accountability, integrity, and commitment.

    "New York Life Investments" is a service mark used by New York Life Investment Management Holdings LLC and its subsidiary, New York Life Investment Management LLC. MainStay Investments is a registered name under which New York Life Investments does business.

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