Princeton Portfolio Takes Off in May

Aims to open up third party sales for Merrill Lynch Investment Managers

Brokerage giant Merrill Lynch is poised offer its U.S. retail mutual funds under an additional brand name designed to appeal to non-Merrill Lynch advisors. The new brand, Princeton Portfolio Research & Management, is to be launched in May by Merrill Lynch Investment Managers (MLIM), the asset management arm of Merrill Lynch that is based near Princeton, New Jersey.

Why now? Merrill Lynch has been thinking about this for a while, according to Merrill Lynch Investment Managers President and CIO Robert Doll. "We wanted to do it at a point in time where we had as much strength as we possibly could," he said, citing strong financial results for the firm, positive, growing net flows, and "exceptional" investment performance.

In a larger sense the move may also reflect the current regulatory environment in which firms are opening up their product architecture to offer suitable proprietary and non-proprietary products to customers.

MLIM has already had some success with sales of its funds by third parties, but much of that has been "not branded MLIM, they've been branded something else, or in most cases, no brand," says Doll. Of the $288 billion of global assets under management at MLIM, $28 billion is through third parties, up from $4 billion at year-end 2002. So what does MLIM stand to gain? "We know we can be successful with third-party, but we think we have one hand tied behind our back in our MLIM labeled products, therefore this change should eliminate that barrier. The marketplace is $3.5 trillion; give us a small sliver of that and that's a lot of money," Doll says. "We have five businesses at MLIM. This is our newest business; it's also the one that has the highest potential, given that $3.5 trillion, so we'd be crazy, we think, to ignore this market, recognizing that we've had lots of success in other channels, and beginning to in this channel, and this should enable [us] to grow it faster."

MLIM expects these newly branded funds to be popular with independent financial and investment advisors, as well as other wirehouse advisors. Doll says their view is that clients of the independents and the wirehouses are looking for "strong products with good performance." He says MLIM aims to deepen "relationships we already have."

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