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May 22, 2014 at 10:29 AM
(Bloomberg) — New York Life Insurance Co., which built the Marketfield Fund into the largest U.S. alternative mutual fund, is seeking additional offerings that allow clients to bet on more than gains in stocks and bonds.
John Kim, chief investment officer, said policyholder-owned New York Life is seeking to acquire more funds. Among the targets are real-estate funds and managers who move money between countries, asset classes and market sectors, he said.
New York Life’s collection of specialized money managers — such as ICAP and Cornerstone Capital Management — has helped assets under management more than double in five years to $521 billion as of March 31, including $179 billion of insurance-company funds. The firm agreed last month to offer energy-focused funds from Cushing Asset Management LP after adding Marketfield in 2012.
“If there are other Marketfields and Cushings of the world out there, we would be interested,” Kim, 53, said in an interview this week in his Manhattan office. “We’re looking to fill out the suite of alternative capabilities even more.”
New York Life, led by Chief Executive Officer Ted Mathas, expanded overseas this year with the acquisition of Dexia SA’s asset manager for more than $500 million. That business, branded Candriam in Europe and Ausbil in Australia, will become a platform for buying up fund managers, Kim said.
“U.S. fund-management organizations have a real opportunity outside the United States over the next decade to build assets,” Burton Greenwald, a mutual-fund consultant, said in an interview. “The U.S. is a very, very mature market.”
Insurers Expand
Principal Financial Group Inc. and MetLife Inc. are among U.S. life insurers using deals to expand in asset management outside the country. Principal said last year that it had spent about $2 billion since 2008 acquiring money managers, including a Chilean pension provider. MetLife acquired Chilean pension firm AFP Provida SA last year.
New York Life will offer some of its funds in Europe, and plans to import funds from the former Dexia business for U.S. investors, Kim said.
The Marketfield Fund, run by Michael Aronstein, had about $2 billion under management when New York Life agreed to add it. Marketfield, which can bet on share declines and use options, now oversees more than $20 billion, making it New York Life’s largest mutual fund. “You marry up a hot asset class with really strong performance with great distribution, and that’s what happens,” Kim said.
Marketfield Struggles
Marketfield has declined 5.9 percent this year, according to data from Morningstar Inc. That performance is worse than about 95 percent of long-short equity funds, according to Morningstar. Aronstein said in an interview that bets on growth in developed markets were to blame.
“Our performance has not been any good this year,” he said by phone. “The market has indicated that it’s more concerned with the likelihood of weakness.”
