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Rating:Direxion's Jacobs Sets out to Solve for Email Routing List Email & Route  Print Print
Friday, June 27, 2014

Direxion's Jacobs Sets out to Solve for "X"

Reported by Anastasia Donde

Brian Jacobs, the newly minted president of Direxion [profile], a $8 billion firm that manages levered ETFs, has come up with a business plan and a new branding strategy, three months after joining. In its marketing materials, the firm will change its name to “Direxion Investments” from just Direxion and its new slogan will be: “Solving for Outcomes.” The font of the “x” in Direxion is also changing from one that used to represent leverage (i.e. “x times”) to an “x” that looks more like the one in math equations that prompt you to solve for “x.”

Jacobs said investors and advisors are thinking about investing in terms of outcomes these days, rather than products and he wants to help clients solve for those specific goals. (At a recent conference, he said, “No one wakes up and decides they need a global macro fund.”).

He also has expansion plans for the firm. He’s planning on hiring external and internal wholesalers, as well as senior managers in national accounts. The firm has six external wholesalers, who are organized by region, and Jacobs plans to hire six more by the end of the year. Direxion is also going to re-organize its internal wholesaling teams (who have titles of regional consultants) and hire more in order to have six by year-end.

“We’re working on aggressive product development, too,” Jacobs said. The firm managed 74 ETF strategies so far, and Jacobs said he has a “strategic beta” product in the works (“strategic beta,” by the way is a term that Morningstar has been using in hopes of trying to re-title the recently popularized “smart beta,” and Jacobs has apparently gotten on board!). He said he has also been in talks with active managers to bring on to Direxion is a sub-advisors. They could be mutual funds or ETFs and this would represent a change in strategy for Direxion, as it’s historically only managed passive funds.

Jacobs, who sat down with MFWire at the 2014 Morningstar Investment Conference to walk us through his plans, joined Direxion on March 31. He was previously a consultant for large asset management firms, and in that role has assisted Cliffwater and Virtus Investment Partners in setting up their their joint venture for an alternative mutual fund Before that, he was the CEO of Hatteras Funds.

Direxion also hosted an event at the New York Stock Exchange on June 19, where the firm listed new ETFs, closed the bell on the floor of the exchange and invited clients and advisors to participate. 

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