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Thursday, July 11, 2013

Like Our SMA? Buy Our Fund, and Vice Versa.

Reported by Tommy Fernandez

Robert Tynes is an investment marketing exec who fully appreciates how tough the mutual fund business is, and he's alright with that.

"We are very cognizant that this is a very competitive, crowded space," Tynes, who is a princical managing director in charge of marketing and business development for Gratry & Company, an asset manager based in Shaker Heights, Ohio., told MFWire.

Tynes' firm just launched its first mutual fund, the Gratry International Growth Fund,which focuses on large cap non-U.S. companies.

He and his colleagues are fully aware of the challenges facing Gratry, which Tynes' described as a "quintessential boutique investment firm, private and independent." Indeed, the firm, which has been around since 1981, has four owners with founder, Jerome Gratry still actively involved.

Tynes said the firm launched this particular strategy in a '40 Act product because it is the firm's flagship strategy, accounting for about half of the firm's assets. Until the launch of the fund, the firm had only offered its strategies in either SMAs or in a model format to accommodate UMAs.

Gratry is offering the fund in order to provide clients with more choice, in particular to reach out to clients who can't meet the minimum in wrap programs.

"The mutual fund, which is offered a much lower minimum, should allow us to garner additional assets on these platforms," he said.

Indeed, Gratry will leverage its SMA distribution relationships to market the fund.

"We have long-standing relationships with these advisors. It may help them to simplify their world. They can use the SMA for bigger clients and the Gratry mutual fund with smaller accounts. They are telling one story to their clients," Tynes said. "It could eventually become a meaningful growth vehicle for the the firm. It is really about choice for our advisor clients."

Tynes said that Gratry has relationships with a number of retail platforms, some of which date back over a decade. Currently, the firm has a dual contract relationship with one of the major wirehouses and a single contract relationship with one prominent European bank. The firm's products are also on two prominent regional broker-dealers and several TAMPs.

In his conversations with distributors, Tynes takes care to mention that the fund will be managed in exactly the same was as the SMA strategy, which has been run by the same team for over 12-years.

"I call the fund a clone of the separate account. Advisors can take comfort in using the fund even though it is brand new. These advisors have been using our SMAs for years, and so what we are hoping really is although our fund is brand new, the advisors will look at the SMAs track record which dates back 17-years," he said.

If the fund succeeds, the firm will look to launch other products. In the meantime, Tynes' team is working to generate appetite for the fund amongst a growing population RIAs as well as consultants that advise small companies in the 401k market.

"I have no illusions about us becoming the next Fidelity. As a small boutique, we can't compete with big firms around marketing and promotion. This fund is simply another vehicle for our strategy," he said. 

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