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Rating:Boston Firm Adopts Not Rated 3.0 Email Routing List Email & Route  Print Print
Monday, May 20, 2002

$124 Million on the Move
Boston Firm Adopts

by: Sean Hanna, Editor in Chief

John Hancock has picked up another $124 million in fund assets through its acquisition of the U.S. Global Leaders Growth Fund. The fund had been advised by New York City-based Yeager, Wood & Marshall. The deal brings the fund into the $29 billion John Hancock family where it will retain Yeager, Wood & Marshall as its subadvisor. It takes the new name of the John Hancock U.S. Global Leaders Growth Fund.

Shareholders of the fund approved the switch in advisors in a vote that took place in a special shareholders' meeting on May 8, 2002.

The arrangement between Hancock and Yeager, Wood & Marshall reflects the consolidation sweeping the industry as firms specialize either in distributing or manufacturing funds. For shareholders of the fund, the deal promises to bolster distribution for the fund and lower expenses as it realizes the economies of scale brought by the Boston-based insurer. The fund will also benefit from the distribution channel that Hancock brings to the table.

Though the fund has a strong track record since its launch in 1995, the six-employee Yeager, Wood & Marshall had been unable to achieve all of the fund's promise. It had sold predominately through Schwab and word of mouth, explained a Hancock spokesperson. She added that the acquisition was a way to reach a much larger audience. In fact, the Hancock sales team started a road show last week to bring word of the fund to broker-dealers, wirehouse brokers and financial planners. Hancock also plans to hold a Web conference to gain additional exposure for the fund.

As part of the deal, the fund will add the same load structure as other Hancock funds (existing shareholders will be able to continue to buy additional shares without the load). Hancock has also agreed to cap the expenses on the fund at 137 basis points, one basis point less than the 138 currently levied on shares.

More to Follow?

The acquisition mirrors another acquisition made by Hancock more than a decade ago when it purchased what is now its technology fund from American Fund Advisors and named that company as subadvisor. Like Yeager, Wood & Marshall, American Fund Advisors was a small shop with a strongly performing fund in a hot niche. That acquisition has played out well and Hancock is looking to repeat the formula.

"If we can find the appropriate products that complement our existing product lineup will do more deals like this," said the spokesperson. She added that the insurer is looking for funds in areas that it does not already offer a competitive product and where sales are strong.

Based on those criteria, look for the firm to kick the tires of large cap value offerings and to look especially closely at something in the "deep" value area.

"At John Hancock Funds, we have embarked on a three-pronged, long-term strategy for increasing our assets under management. We will build products internally by leveraging our in-house investment talent; we will partner with 'best of class' firms that complement our strength in investment management; and we will buy funds or fund families with superior, long-term performance records," said Maureen Ford, chairman and chief executive officer of John Hancock Funds.  

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