Steve Rudman is expanding Direxion's [profile] sales force and shifting the mutual fund firm's sales model.

Rudman, who joined Direxion as managing director and head of sales, confirms that he has four more external wholesaling positions (Direxion calls them "external regional directors") to fill, beyond the seven externals he already has on his team. And he's just made four additions to his distribution force.

It's all part of a transition to what Rudman characterizes as a "more normal external wholesaling team, supported by a traditional internal team." Previously, Rudman tells MFWire, Direxion had a blended team of external wholesalers and hybrid wholesalers supported by internal wholesalers.

Rudman's distribution force now includes 19 people: seven are externals, five are on the institutional strategist team, and he has internals, too. He's now "thoughtfully and methodically" hunting for additional externals to cover four territories: one centered on Texas that extends to Arkansas, Kansas, Louisiana, New Mexico and Oklahoma; one targeting Northern California; one covering Ohio and Michigan; and one covering the Pacific Northwest, probably from Seattle.

"I would love to have it done by the end of the year," Rudman says, while adding that it's a "flexible deadline." "We'll be more patient than maybe most would be."

Further down the line, Rudman adds, he may add an external to break out a 12th territory, Florida.

As for Rudman's most recent hires, last week Direxion unveiled the addition of Brendan Cavanagh, Phillip Hall, Michael Lee Jr. and Joe Vaughan to the Direxion distribution force. All four report to Rudman.

Cavanaugh, an alum of client relations at Goldman Sachs, joined Direxion in New York City as vice president and capital markets institutional strategist. Rudman praises Cavanaugh as "a super bright" addition to the Direxion team.

Hall joined Direxion as senior vice president and regional director, covering the North Central territory from Chicago. Rudman notes that Hall spent 15 years in a number of positions -- advisor, branch manager, district manager, and then regional business development manager -- at Direxion's "number one client," Morgan Stanley. Rudman lauds Hall as a "well experienced, ... optimistic, high energy guy." Hall had been based in Southern California, yet his move to Direxion also brings him back to Chitown.

Lee joined Direxion as senior vice president and regional director covering the Southeast. He most recently served as a regional director covering the Southeast for Hatteras Funds. (Direxion president Brian Jacobs previously served as CEO of Hatteras.) Rudman notes that, given Hatteras' work in liquid alternatives, there's some overlap with Direxion's client base, and he describes Hall as a "very focused, motivated, smart" wholesaler.

MFWire could not immediately reach Hatteras distribution chief Mike Hutten for comment on how Lee's duties are being handled.

Vaughan joined Direxion as senior vice president and institutional strategist. Vaughan most recently served as vice president and New England regional director for Salient Partners, and prior to that he worked at Hatteras and Eaton Vance. Rudman confides that he and Vaughan knew each other back at Eaton Vance in the 1990s, and Rudman calls Vaughan a "true portfolio allocation expert with a deep understanding of product."

Dave Linton, managing director and head of retail distribution at Salient, confirms that "there is a search underway for John's replacement."

Jacobs put the new hires in the context of increased investor interest, and increased market share, for "non-traditional investment products."

"It is important that advisors and investors understand the strategies that are available to them as well as how these options can help investors reach their financial goals," Jacobs states. "John, Phil, Michael and Brendan will work with financial advisors and their clients to successfully utilize our unique investment strategies to achieve their desired outcomes." 

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