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Friday, July 16, 2010

Eggers is Back

Reported by Armie Margaret Lee

Tom Eggers has resurfaced on the mutual fund scene. After a two-year break, the former CEO of Dreyfus Corp. and Scudder Investments took on the newly created title of chairman at American Independence Financial Services. Eggers heads up sales and distribution efforts at the New York City-based firm, which he joined last month.

Tom Eggers
American Independence Financial Services
"I felt that after two years, I missed the business," said Eggers, 58, who retired from Dreyfus in April 2008. "I like what they are doing at American Independence."

After leaving Dreyfus, Eggers took on a chief operating officer post at Minyanville Media, where he remains an investor and a director. He also continues to be an investor and director at NextTalk Inc.

Eggers' arrival at AIFS comes as the firm is in the midst of a distribution push, having built track records for its offerings.

John Pileggi
American Independence Financial Services
Managing Partner
"We spent 2005 to 2008 building the manufacturing side and the requisite track records and now we're building out the distribution side," said managing partner John Pileggi. "Now we have a story we can talk about to pass the various screens that intermediaries use to filter fund offerings."

AIFS hopes that Eggers' stature and deep network of relationships can help catapult the firm to the next level. "Tom is a magnificent professional," said Pileggi, who met Eggers a year ago. (Eggers has known some AIFS employees on the investment side for more than 20 years, dating back to their days at Mitchell Hutchins Asset Management/Paine Webber.)

Not long after he joined the firm, Eggers brought in fellow PaineWebber alum Joe Fuschillo as senior managing director. Fuschillo, most recently with Prudential Financial, will help Eggers work on the strategy and the tactical implementation of the distribution and marketing program.

And earlier this year, in April, AIFS hired Mark Thoma, who previously served as director of national accounts at AFBA 5Star Funds, which in March was purchased by FBR. At AIFS, Thoma will work on relationship management, national accounts and help Eggers and Fuschillo with strategy.

Eric Rubin
American Independence Financial Services
AIFS has a total of about $1 billion of AUM, including $860 million in its 15 mutual funds, two of which were launched in the past month. Five of the funds are sub-advised.

The company's three biggest funds are the $250 million Kansas Municipal Fund, $125 million U.S. Inflation-Indexed Fund and the $100 million Stock Fund.

AIFS has been around since 2005. It began life as Arrivato Advisors, then rechristened itself American Independence Financial Services after it purchased Intrust Financial Services' $600 million fund family, American Independence Funds, in March 2006. In 2008, AIFS acquired three funds from Fischer Francis Trees & Watts and last year, it took over Fusion Asset Management's Fusion Fund.

Prior to Eggers' arrival, distribution was part of Eric Rubin's broader set of duties as the firm's president. AIFS currently has 12 external wholesalers.

AIFS currently focuses its distribution efforts on the independent channel. "We feel that's where we can make more of a difference at this stage of our evolution," Pileggi said.

He doesn't envision AIFS making a push into the wirehouse channel any time soon.

"The timing for us in terms of wirehouses is better left for the longer term simply because the wires have had substantial internal changes such as mergers and management reorganizations and are very internally focused with respect to combining product offering inside the merged entities," Pileggi said. "Some of the things we do very well may not be timely for them as they rationalize what they already offer. But we will ultimately be there."

On the investment management side of the firm, AIFS plans to make an announcement soon about new additions to the team. Also in the near future, the company plans to announce a sub-advisory relationship with a large fund company, Pileggi said.

As for Eggers, working at AIFS represents a change from his previous employers in financial services.

"I did not want to have the type of career that I had for 30 years," he said. "All I knew was working at large firms. I wanted a break from that."

Eggers started out as a stockbroker at PaineWebber and later became managing director at PaineWebber subsidiary Mitchell Hutchins Asset Management. Eggers joined Dreyfus in 1996, rising to become president. He left to take the top job at Scudder Investments, then returned to Dreyfus in 2005.

Eggers sees a lot of opportunities for smaller fund firms to gain market share. "This environment is good right now for small firms because of the dislocation that occurred in 2008," he said.

In addition, "platforms allow people to customize their portfolios and as a result, small fund companies with good products and performance have as much chance as the larger ones." 

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