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Rating:Lindner Storms Castle Ark ... Kinda Not Rated 3.0 Email Routing List Email & Route  Print Print
Wednesday, November 22, 2000

Lindner Storms Castle Ark ... Kinda

Reported by Tamiko Toland

Lindner Funds is trying to shake performance blues and shareholder attrition with a new investment stable and an updated marketing strategy. The company has been using an unusual protocol for bringing sub-advisors on board: it doesn't.

Most recently, the company hired five portfolio managers who work for CastleArk Management in Chicago, rather than taking on CastleArk as a sub-advisor.

Lindner used the same tactic in April of last year, when its hired chief investment officer Mark Finn and four other portfolio managers. Three came from Finn's Vantage Consulting Group in Virginia, and the other two from Boston-based Ernst Research. Last year, Lindner was in a state of emergency.

"In 1996 to 1999, Lindner experienced a great erosion to the base. That's the reason the board reached out to Finn and his group," said Lindner spokesman Hank Boerner. "It needed a really rapid turnaround and the existing managers were not doing it." Taking on a sub-advisor, he explained, would take too much time since it requires shareholder approval.

A year-and-a-half later, however, the picture is different, but Lindner again circumvented shareholders by hiring the managers from a small shop. While Boerner wouldn't characterize the situation today as critical, he stressed the company's need to react quickly in a volatile market. "It was a timely issue," he said. "This market is sort of a scary market."

Shareholders need reassurance, which is another reason to bring new advisors on quietly; today's consumers scrutinize a breadth of information on funds, including management changes.

"You don't want to make too many changes. It makes people nervous," Boerner said.

Lindner also looks to expand its no-load fund offerings with an eye to tax-managed funds, high-yield bond funds, and possibly a return to global funds. Furthermore, the company is exploring different avenues for extending its distribution network, especially fee-based relationships with brokers rather than commission-based compensation. 

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