is planning its next strategic move. Two years after taking Berger's chief executive officer slot, Jack Thompson
says Berger is poised to make its mark on the fund industry now that its house is in order. Yet market conditions aren't making Thompson's job any easier. What's next?
"We're looking at options is all I can say at this point," said Thompson. "We're not sitting idly on the sidelines. We're looking at how best to structure the company moving forward."
Berger can stick with its characteristic growth style or start diversifying internally through hiring or acquisition. However, doing so would seriously alter the firm's perceived brand and shift its overall marketing focus.
"We haven't ruled out becoming just a niche equity shop," Thompson said. "We have just begun a fairly detailed strategic planning effort, so everything is on the table at this point."
The severe changes in the market have altered the operating environment for Berger and necessarily influences the firm's next steps.
"It took those old fogies in '73, '74 years to lose this much money," quipped Thompson. "[The current generation] been able to do it much faster. [Berger is] weighing all these things and have engaged outside assistance to help us with this process."
In a market in which over 100 fund complexes have lost at least a quarter of their assets, Berger has performed relatively well. It has lost a little over nine percent of assets under management since the end of March, according to Financial Research Corporation.
According to Thompson, the firm meets in several weeks with an unnamed advisor to help formulate its strategy moving forward. He sees the proliferation of supermarkets and broad availability of a wide variety of funds as a force which influences the shape of the mutual fund marketplace.
"The dilemma in my mind is, with the growth of the supermarkets, can someone that tries to expand into arenas they have not been in the past be successful at it? That's the decision that we can make: somebody doesn't have to go to one fund family any more," said Thompson. "I think there are pros and cons of being a niche player and being broadly diversified."
Cost provides a barrier to acquisition of a value house, and though market conditions have given value a leg-up, if they persist, undercapitalized firms of all investment styles may be looking for a way out. With parent Stilwell Financial behind a potential deal, Berger is a boutique with big-boy backing.
Berger needs to solidify its brand image, which even Thompson admits is "probably too boring." While strong growth carried marketing momentum in the bull market, the bear forces firms to see marketing as more than simply the best way to broadcast performance.
In a recent marketing move, the firm opened a new investors center in the high-end Cherry Creek Shopping Mall, in downtown Denver. As the firm's next steps solidify, however, it will embark on a branding campaign and make strong steps towards turning Berger into more of a market presence.
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