Principal Funds Ramps up Investment Only Strategy
August 30, 2007 (Des Moines, Iowa) — Principal Funds, one of the nation's leading managers of lifecycle asset allocation funds1, has announced plans to ramp up its investment only (IO) strategy aimed at third-party asset accumulation platforms. The IO initiative supports financial professionals with products and services from Principal Funds available through third-party administrators (TPAs), registered investment advisors (RIAs), recordkeepers and a variety of other investment and trading platforms.
To lead the effort, Principal Funds has hired industry veteran Mark Marwede as managing director of IO solutions. Marwede brings 20 years of financial services experience, and will head a dedicated IO team responsible for securing relationships with a variety of firms and financial intermediaries to drive increased sales. Marwede was most recently a senior vice president at Fidelity Investments, where he managed institutional clients, positioning sub-advised, retail and advisor funds within pension and annuity programs. Four directors of IO sales are already working actively in the field with financial professionals and the wholesale distribution team of Principal Funds. They include Chris Welch (Southeast region), Rob Logan (Central region), Matt Beaulieu (West region) and Bernie Fragomeni (Northeast region).
According to Tim Minard, senior vice president of distribution, Retirement and Investor Services at the Principal Financial Group®, the firm plans to leverage its market leadership in retirement investing and global asset management. "With the recent addition of Principal Funds providing expanded retail fund distribution, the integration of these efforts and greater emphasis on the investment only and RIA channels is a natural extension of our strategy," he said. "Marwede and the team are well-positioned for success due to the robust sales and relationship management infrastructure already in place serving consultants and financial professionals, in addition to the strong appetite for our institutional grade investments."
According to David Reichart, second vice president of business strategy for Principal Funds, Principal Funds Distributor currently has agreements with more than 30 outside platforms, with plans to grow relationships significantly in coming years. Reichart says they are targeting defined contribution IO clients, and a diverse array of other new markets and platforms.
Principal Funds will offer the same complete investment platform and share class flexibility to the IO client base that it currently provides to full-service retirement clients. "Unlike many competitors that offer only retail or a limited number of share classes, we are making our entire suite of share classes available including retail, retirement, and institutional classes — seven in total currently."
Reichart cites a number of market differentiators including their leadership in managing lifecycle asset allocation funds and the diverse investment capabilities of Principal Global Investors. The Principal LifeTime Funds and Strategic Asset Management portfolios will serve as a foundation for the IO strategy, complemented by a full range of investment options including a unique mix of asset classes, investment styles and portfolio structures. With five years since their inception, Principal LifeTime Funds have among the longest target-date track records in the market today. The Principal® also offers a robust due diligence program, value added tools to help advisors build their business, and a multi-manager investment approach.
About Principal Funds
Principal Funds is a leading provider of mutual fund solutions for individual investors and retirement plans, with approximately $60 billion2 in assets under management. Principal Funds is backed by the extensive asset management capabilities of Principal Global Investors and other leading subadvisors and has special expertise in asset allocation solutions. Including target risk and target date funds, Principal Funds is the 5th largest manager of lifecycle funds in the industry.*3 Principal Funds are sold through a nationwide network of financial professionals associated with brokerage and financial planning firms. Principal Funds Distributor, Inc. and Principal Global Investors are both members of the Principal Financial Group.
About the Principal Financial Group
The Principal Financial Group® (The Principal®)4 is a leader in offering businesses, individuals and institutional clients a wide range of financial products and services, including retirement and investment services, life and health insurance, and banking through its diverse family of financial services companies and national network of financial professionals. A member of the Fortune 500, the Principal Financial Group has $282.1 billion in assets under management5 and serves some 18.1 million customers worldwide from offices in Asia, Australia, Europe, Latin America and the United States. Principal Financial Group, Inc. is traded on the New York Stock Exchange under the ticker symbol PFG. For more information, visit www.principal.com.
Insurance products and services issued by Principal Life Insurance Company.
1) Principal Funds is the fifth largest manager of lifecycle mutual funds in the U.S. by assets under management through 6/30/2007 (Source: Financial Resource Corporation).
2) As of June 30, 2007. Includes Principal Investors Fund, Inc. and Principal Variable Contracts Fund, Inc. assets.
3) As of June 30, 2007. Source: FRC Mutual Fund Lifecycle Report.
4) "The Principal Financial Group" and "The Principal" are registered trademarks of Principal Financial Services, Inc., a member of the Principal Financial Group.
5) As of June 30, 2007.
