Adoption Approved! Two Funds Get New Parent
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Wednesday, October 22, 2003

Adoption Approved! Two Funds Get New Parent

There may be no easier way to make an adoption these days than by getting into the fund business. Wednesday Forward Management [see profile] said that it is adopting two mutual funds from Pictet International Management. The funds have a combined $96 million in assets.

Fund adoptions are an increasingly common way for investment managers with niche fund products to hand over responsibility for the marketing, distribution and operations of their funds. In most cases, including this one, the former advisor stays on to run the fund portfolio as a subadvisor. The quick pace of these transactions are mostly a result of the stagnant market and relatively high cost of running small funds.

In this case San Francisco-based Forward Management is taking over the management contract for the Pictet International Small Companies Fund ($27 million in assets according to Morningstar) and Pictet Global Emerging Markets Fund ($69 million in assets). In both cases the funds will adopt the Forward name and retain Pictet as their subadvisor. Pictet is an affiliate of Geneva-based Pictet and Cie.

Peter O'Reilly, managing director at Pictet said the decision to sell the management contract for the funds was made because "its time, energy and resources are better spent on portfolio management and the delivery of superior performance."

He added that Forward is well equipped to deliver the two funds to financial advisors. Forward Management offers only sub-advised funds for which it focuses on sales and marketing.

"This acquisition should help the shareholders from both Pictet and Forward," said J. Alan Reid, president and CEO of Forward Management. "Current Pictet shareholders should see very few changes to their accounts. Pictet will continue to act as the sub advisor to these funds and the investment management fees will not change for them."

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