An Employee-Owned Shop Revamps Its Second MF
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Thursday, August 08, 2019

An Employee-Owned Shop Revamps Its Second MF

An employee-owned financial services firm in Illinois is revamping its second mutual fund. And more mutual funds, and more investment teams, may not be too far down the line.

Kathryn A. Vorisek
Mesirow Financial
Senior Managing Director, Head of Equity Management
Today Kathy Vorisek, senior managing director and head of equity management at Mesirow Financial, and Dominick Mondi, president and CEO, unveiled the Mesirow Small Cap Value Sustainability Fund. The fund, first launched in December as the Mesirow Small Cap Value Equity Fund and now rebranded and focused on ESG, is powered by the equity group within Mesirow's investment management arm, a group that focuses in particular on small and smid cap investing.

Looking ahead, Steve Swierczewski, senior managing director and head of Mesirow's global investment management distribution team, hints that the Chicago-based firm could be launching more funds "in the relative near term." Each new fund could be powered by one group within investment management or could be a collaboration across multiple groups, Swierczewski tells MFWire.

Mesirow's six investment management groups include: the equity team, which powers the fund refocused today; the high yield team, which launched Mesirow's first mutual fund in December; a core fixed income team; a private fund-of-funds team; a direct real estate private funds team; and currency hedging risk management and currency alpha teams. All six groups mostly support institutional investors, at least so far.

The high yield and equity teams both joined Mesirow within the last couple of years, and Swierczewski hints that Mesirow may do more such deals.

"While certainly not on a buying spree, we are routinely on the lookout for high quality investment capabilities that might benefit from a strong partnership with Mesirow," Swierczweski says.

As for the freshly unveiled small cap fund, Swierczewski notes that "small cap value equity is still relatively young in its maturation in ESG," hence the opportunity for the fund.

"A lot of small cap companies aren't really thinking this way yet," Swierczewski says. "They may not be especially adept at providing transparency."

The equity team, which has worked together for more than 15 years, is no stranger to ESG, says Leo Harmon, managing director, PM, and director of research. Indeed, Swierczewski calls the fresh fund "just but one step in an ongoing focus in the world of sustainable investing and ESG."

"Traditionally, we've always incorporated ESG factors, particularly as risk factors, in our analysis of companies," Harmon tells MFWire. "We do not view this as being a product that will concede returns."

Though most of Mesirow's investment management clients are institutional investors, launching mutual funds is an opportunity to amp up distribution through retirement plans and financial advisors, Swierczewski says.

"It provides the in-place distribution team with some new venues and some new structures that will allow them to be more effective in the channels that they serve. We are not planning to build a massive wholesaler force," Swierczewski says. "We have a focus much more so on some targeted wealth management platforms and the larger, more sophisticated RIAs or those firms where ESG and sustainable investing is a priority and a particular growth area."

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