Fund Action & Fund Directions present The 14th Annual Mutual Fund Industry Awards

Award Dinner & Ceremony Sponsor: Grail Partners

Opening Cocktail Reception Sponsor: Deloitte

2007 Photo Gallery

Lifetime Achievement Award Winner:

George Roche, T. Rowe Price

George Roche
George Roche, retiring president and chairman of T. Rowe Price, will be honored with a lifetime achievement award as part of II News' 14th Annual Mutual Fund Industry Awards. He spent his 38-year tenure building the investment management shop into a publicly-traded powerhouse.

T. Rowe has $308 billion in assets under management and a debt free balance sheet with $1.2 billion in net liquid assets as of the third quarter of 2006. More recently, Roche has led the firm to expand internationally, growing its international analyst force to more than 25 and positioning it to continue its growth in an increasingly global business. T. Rowe under Roche's leadership has also capitalized on the growing defined contribution market, most recently as a leader in the target-date fund arena with $13 billion under management as of October.

T. Rowe's strong balance sheet is one source of pride for Roche, whose focus on the long term has kept the firm from getting into the earnings estimate "game," as he called it. But, said Roche, the real credit for the firm's financial position is its investment performance. "The reason we're financially successful is because we've done a good job for our clients," he said. About 60% of the firm's rated funds have four- or five-star rankings from Morningstar.

Roche said a big difference from when he joined the firm as an analyst in 1968 is that T. Rowe's growth has turned the firm into a big business enterprise, with more than 4,000 employees and sales across four channels.

James Kennedy, T. Rowe's new president, said that T. Rowe has looked to Roche to solve some of its biggest hurdles, including a capitalization challenge that led Roche to take the company public in 1986. The initial public offering funded buyouts for retiring partners and long-term investments in the growing business.

Roche will keep his office at T. Rowe's Baltimore headquarters and assume a consultant role in 2007, though he is unsure about how many hours he will work. Kennedy said Roche already has his first project, although he declined to provide details. Kennedy expects not only to see a lot of Roche in the next year, but "over the next decade," he said. "He's too valuable to let go."

Fund Leader of the Year:

Jim Hawkes, chairman and ceo, Eaton Vance

Jim Hawkes

Hawkes has moved Eaton Vance from a firm known for tax-managed investing, bank loan funds and municipals into the mainstream. The firm is now 14^th in long-term fund assets. Eight-seven percent of equity and 98% of fixed-income funds beat their Lipper peer averages this year and 49 funds are now rated four- or five-stars by Morningstar. Hawkes also presided over the largest-ever closed-end fund initial public offering--the $2.62 billion Tax-Managed Diversified Equity Income Fund.

Gary Black, ceo, Janus Capital Management

Gary Black

The fruits of Black's revamp of Janus' research operation helped the firm win Morningstar's Most Improved Performance award this year. Janus' sales shift to the intermediary market has taken shape, with assets in the direct channel below 30%. Outflows, meanwhile, have also been stemmed dramatically, from nearly $10 billion in 2005 to about $4 billion as of October 2006.

Martin Flanagan, president and ceo, Amvescap

Martin Flanagan

As Amvescap leader, Flanagan has overseen the landmark acquisition of PowerShares Capital Management (see Deal Of The Year, page 8), first announced in January and completed in September. He has also begun a policy of using Amvescap managers around the world to run AIM funds, seeking to bring the various parts of the firm closer together to capitalize on its different strengths. Under Flanagan, outflows have been dropping, and were down by 22% year-on-year at the end of September.

James FitzGerald, managing director of retail marketing, Munder Capital Management

James FitzGerald

FitzGerald has transformed Munder Capital Management. His innovative strategies have nearly doubled the firm's mutual fund assets to $6 billion, while slashing the cost of distribution to half the industry average. Munder has shed its tech shop reputation and is now a respected asset manager. Retail growth was a critical element in the firm's management-led buyout this year.

Deal of the Year:

Amvescap/PowerShares Capital Management

Martin Flanagan and Bruce Bond engineered the deal that saw AIM Investments' traditional fund distribution channels market a distinct line of exchange-traded funds--a first for a top fund firm. Having grown by $3 billion in the previous nine months, PowerShares' assets jumped by another $2 billion in the two months following the deal. The firm has already capitalized on the deal, filing for the first target-date fund line that will include both ETFs and traditional mutual funds.

Guardian Life Insurance/RS Funds line of RS Investments

Masterminded by Guardian's team of Dennis Manning, president and ceo, Bruce Long, executive v.p. of equity products and Thomas Sorell, executive v.p. and chief investment officer and RS' CEO Terry Otton, the merger placed Guardian's 90-person wholesaling team behind the RS fund line. It also created a 23 fund lineup with $15 billion under management. The merger brought together asset management and insurance businesses--a trend that is likely to grow with shifting industry focus to providing retirement income.

Dennis Manning

Bruce Long

Tom Sorell

Terry Otton

BlackRock/Merrill Lynch Investment Managers

Laurence Fink, BlackRock's chairman and ceo, andRobert Doll, president and chief investment officer of Merrill Lynch Investment Mangers, brought together BlackRock and MLIM in a historic deal. The pairing was hailed for combining one of the three top bond managers in the U.S., BlackRock, with MLIM, which is strong in equity and international, components that BlackRock was missing. The $1.046 trillion deal also followed in the footsteps of Legg Mason's andCitigroup's deal last year, which recognized that distribution cannot always peacefully coexist with investments.

Phoenix Companies/The Insight Funds family of Harris Investment Management

George Aylward

George Aylward, president and chief operating officer of Phoenix Investment Partners, led the industry's largest fund adoption--where a firm takes over a mutual fund and hires back the subadvisor. Phoenix's $10.7 billion acquisition of the Harris Insight Funds from Harris Investment Management added 19 highly-rated funds, including equity, fixed-income and international, to Phoenix's $12.9 billion fund family.

Fund Marketer of the Year:

Mark Killen, senior v.p. of corporate and product marketing, American Century Investments

Mark Killen

Killen, who overseas corporate strategy and marketing of American Century's offerings, was the main force behind the firm's link-up with Lance Armstrong and the Lance Armstrong Foundation (see Ad Campaign Of The Year, page 7). Killen also oversaw the launch of American Legacy Funds, quantitative offerings of large-cap, focused large-cap and multi-cap, and the launch of four other funds, Long-Short Equity, Core Plus, Short Duration Fund and International Core Equity. Long-Short Equity, a load fund, has already garnered $100 million.

Stephen Gresham, executive v.p. and director of retail markets, and Frank Waltman, senior v.p. of product development and management, Phoenix Investment Partners

Stephen Gresham

Frank Waltman

Gresham and Waltman have engineered a turnaround at Phoenix through the unusual move of switching from a distribution strategy that was 80% managed accounts and 20% funds to the reverse in 2006. The team also sought to improve performance by hiring subadvisors, adopting small institutional funds and revamping existing funds. The duo's efforts have paid off. With 10,000 new advisors and a campaign called Small Funds, Big Performance, Phoenix brought in $654.9 million in net flows through Nov. 30.

Rob Arena, senior v.p. of retail product management and Phil Eichinger, senior v.p and national sales manager, The Hartford

Rob Arena

Phil Eichinger

The Hartford's marketing efforts have taken a multi-pronged approach. High-profile national advertising--including sponsorship of the NCAA March Madness tournament--was coupled with an effort to push its senior executives, particularly Chief Investment Strategist Quincy Krosby, as industry thought leaders. The firm has also dedicated 101 wholesalers to selling its funds, an increase from 90 at the start of 2006. Sales doubled in 2006, with $8 billion brought in as of Sept. 30, making The Harford the fastest retail fund line in history to reach $30 billion in assets.

Michael Sapir, ceo, ProShares

Michael Sapir

Communicating inverse and leveraged strategies to the retail market during a din of summer exchange-traded fund launches was a challenge that ProShares successfully overcame. While some new ETF firms have struggled to gain assets quickly, Proshares passed $2 billion in December. Investor-friendly marketing literature and a Web site theme--Exchange-Traded Funds, Chapter Two--which used the flood of new ETFs to its advantage helped do the trick.

Advertising Campaign of the Year:

The Vanguard Group

The Vanguard Group's Library campaign represents some of the best of print/online advertising integration in the industry. Using regular, well-placed print ads in publications such as The Wall Street Journal, Vanguard teased investors towards a new Web site with an attractive, easy-to-use introduction to its target-date funds. Sean Hagerty, principal and head of marketing, led the group behind the campaign.

American Century Investments

Mark Killen, senior v.p. of corporate and product marketing, masterminded American Century's team up with world-famous cyclist Lance Armstrong to promote a rebranded line of asset allocation funds as the Livestrong Portfolios. But Armstrong did more than endorse the funds and appear in national print and broadcast ads in a campaign created by TBWA. He also took part in employee events, client meetings and conferences and the annual American Century Championship celebrity gold tournament. As a result of the campaign, awareness of the firm among affluent prospects increased 37.9%, according to Cambridge Brand Analytics.

Ameriprise Financial

Ameriprise Financial launched a campaign with Saatchi & Saatchi to build its brand after the spin-off from American Express. The campaign has achieved a 51% brand recognition rate, compared to a 60% industry average for long-established fund firms. Under the direction of Kim Sharan, chief marketing and communications officer, the ads target affluent baby boomers with the concept of "dream planning" rather than prosaic retirement planning. The radio and broadcast campaign features Hollywood legend Dennis Hopper

Sales Success of the Year:

Brian Barish, president and research director, and Nancy Wigton, principal and director of marketing and client service, Cambiar Large-Cap Opportunity Fund

Brian Barish

Nancy Wigton

The high-performing Colorado-based boutique firm emerged in 2006 after years as a Morningstar Hidden Gem. In late 2005, Cambiar introduced a lower-minimum investor share class, cut expenses and used the performance-emphasis of fund selection units to its advantage, having been in the top-third of its peers every year since 1999. Assets in 2006 grew by 350% to $2.5 billion.

Tim Meyer, ETF product manager, Rydex Euro CurrencyShares

Tim Meyer

Rydex Investments started making the argument that currency represents its own asset class at the right time: the dollar was down more than 10% on the euro in 2006. Investors responded to Rydex's pitch, pouring almost $1 billion into Rydex's Euro exchange-traded fund. The ETF's success is also a rebuke to industry critics who maintain that niche ETFs are being launched at the top of the market: growing currency concerns have followed the Rydex launch, not vice versa.

Arnie Schneider, founder of Schneider Capital Management and lead manager of Schneider Value Fund

Arnie Schneider

Scheider founded Schneider Capital Management and launched this five-star Morningstar fund in 2002. This year the small fund has brought in about $101 million, doubling assets to $202 million. Schneider, which has a cheap expense ratio, particularly given its small size, uses fundamental research and a strict value discipline in looking for investments. The fund has returned 20.09% over three years, 7.93% more than the S&P 500, as of Dec. 15.

Ric Dillon and Tom Schindler, portfolio managers of Diamond Hill Capital Management's Small Cap Fund

Ric Dillon

Tom Schindler

Dillon and Schindler, both of whom have stakes in Diamond Hill, are small-cap value managers. The fund brought in about $108 million in 2006, taking it to $530 million in assets. The four-star Morningstar-rated fund has returned 17.71% over five years, 10.92% over the S&P 500. The managers are willing to hold sizable stakes in particular sectors and hold cash when they do not find good investments.

SMA Player of the Year:

Lidiette Ratiani, senior v.p. and director of investment consulting solutions, Wells Fargo

Ratiani has led Wells Fargo to number nine in Cerulli Associate's rankings of separately managed account sponsor platforms. Last year the bank took in almost $2 billion, bringing total assets to $10 billion. One catalyst for growth was the move to unbundle fees. This allowed clients to see the components of their fees and pay a different price when using proprietary investments, third-party mutual funds and other investments. Wells Fargo saw an immediate boost in sales as advisors gravitated towards the transparent program.

Ann Bergin, managing director, Depository Trust & Clearing Corp., Paul Hatch, managing director, Smith Barney Consulting Group, Chandresh Iyer, managing director, Citigroup Global Transaction Services and Mark Pennington, partner, Lord Abbett, chairman of the board, Money Management Institute and chairman emeritus of the MMI.

These four players kicked off the largest effort yet to rid the separately managed accounts industry of its out-of-date operational infrastructure, more reminiscent of the 1970s than 2006. DTCC introduced a service to centralize the processing of managed accounts, and Consulting Group and GTS formed a partnership with DTCC giving the hub critical mass. The standards effort came under the direction of Pennington.

Curt Overway, president, Managed Portfolio Advisors, IXIS Asset Management Advisors Group

Overway has led Managed Portfolio Advisors, the overlay management division of IXIS, to a leading position in the business of providing an investment quarterback to platforms. The firm has placed 62 strategies--half of them new--with Merrill Lynch, UBS and Credit Suisse, among others. Managed Portfolio Advisors has also pioneered innovative income-oriented strategies for baby boomers and has expanded distribution overseas, to banks and to small- and mid-size institutions.

Dan McNamara, investment products group executive, Bank of America

Dan McNamara

Bank of America has been one of the fastest-growing managed account sponsors and has been a force for change for managed money in the bank channel. McNamara has overseen the growth of the consulting services group to more than $30 billion. In 2006, BofA introduced a unified managed account that offers 72 models, tax management, multiple asset classes and overlay services to affluent investors in one account.

Best Post-Trade Technology Implementation:

OppenheimerFunds, transfer agency platform – During a review of options that could fill its needs for its 529 business, OppenheimerFunds found a platform that also aided in the operations process for its institutional money market funds. New in the space, the firm finally settled on Envision Financial Systems' PowerAgent platform that would serve its needs in the front- and back-office. In particular, Envision worked with OppenheimerFunds to create a variety of links to its custodian banks, reducing headcount and automating the movement of money to the banks from the institutional buyer. The platform is also built using a rules-based platform, allowing the firm to make changes internally as needed without always requiring the involvement of the vendor. Susan Cornwell, senior v.p. of TA operations, helped lead the firm in its ultimate direction.

Principal Financial Group, automated financial reporting platform – While Principal had already implemented a platform for its financial reporting function, the firm began looking for a new platform to upgrade its capabilities and allow Principal to keep pace with technological changes. It chose Confluence and helped develop its ClearPortfolio platform as it outlined its needs. Among its many features, the platform automates the calculation process and eliminates manual data input and scrubbing. Confluence was also the first fund firm to use the platform to create print-ready reports internally (without relying on an outside typesetter) that the firm can send to investors, service companies and reporting companies such as Morningstar and Lipper. Layne Rasmussen, v.p. and controller, and Sara Reece, senior financial accounting leader, both played roles in making the decision.

Putnam Investments, OTC derivatives trade processing – At the same time the operations world was focusing on over-the-counter derivatives confirmation backlogs on the sell-side, the buy-side struggled with the same issues. Putnam took steps to reduce their backlog by first implementing Markit's Trade Processing platform to automate matching for the paper confirms for its OTC trades and then routing its trades with the Depository Trust and Clearing Corp.'s Deriv/Serv through the platform as well. As the first fund firm to implement the platform for both its straight-through-processing (STP) and non-STP trades, Putnam has managed to decrease its backlog while increasing volumes for single name swaps, indices and tranches. Putnam's Diane Doering led the firm's search in an effort to close the processing gap.

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