Merrill Lynch has set up a separate marketing unit to sell its Mercury mutual funds through outside channels. A.G. Edwards brokers are among the first to sell the product.
Mercury Asset Management now has six funds in the United States, the first introduced in October 1998. By summer, 16 more will be available, says Christopher Blunt, who joined Merrill in 1999 to head the new Mercury Fund Distributors unit in New York.
Mercury funds currently have about 2 billion dollars in assets. Blunt expects to raise 2 billion dollars more for the fund family this year.
"We're a year ahead of where we thought we'd be," he says. "We're setting a goal of 20 billion dollars in assets under management within five years."
The Mercury distribution effort targets insurance subaccounts, RIAs and smaller brokerages (see "Outside Sales"). Blunt plans to have 20 wholesalers on board by summer, separate from Merrill Lynch fund wholesalers.
Nine funds slated to debut by the end of May will be driven by quantitative analysis and managed by a team brought over from Bankers Trust, Blunt says. "We're also creating Mercury funds as spokes of new Merrill Lynch funds as soon as the Merrill funds get a track record," he says.
A Merrill Lynch rep in the Midwest supports the outside sales effort. "We should have access to everyone else's products and everyone else should have access to ours," the broker says.
Merrill Lynch has a three-step external sales strategy for its Mercury funds:
* Distribute through insurance subadvisers.
* Cross-sell through the 2,000 RIAs who sell Merrill-owned Hotchkis & Wiley funds.
* Sell through regional and independent broker/dealers.
Merrill has inked selling agreements with insurers Pacific Life, Nationwide and Equitable. The firm also plans to have agreements in place before the summer with at least six regional and independent brokerage firms in addition to A.G. Edwards.