Insight: Guggenheim Partners wins bond investors, looks to Europe next

Mon Jan 6, 2014 7:06am EST
 
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article | Single Page
[-] Text [+]

By Jessica Toonkel

NEW YORK (Reuters) - Financial services firm Guggenheim Partners has attracted attention recently for its involvement in high profile deals: it led a group of investors in buying the Los Angeles Dodgers baseball team and helped engineer Verizon's (VZ.N: Quote) $130 billion acquisition of Verizon Wireless.

But it is the firm's lower-profile asset management division that has been winning investors' interest of late. The division has quietly quadrupled its assets under management from $40 billion at the end of 2008 to $164 billion at the end of September and now represents the lion's share of its parent's $190 billion in assets under management.

Notably, investors poured more than $4.6 billion into Guggenheim's signature bond funds and exchange-traded funds in 2013 - the same period when they were draining more than $44 billion out of bond funds from Pacific Investment Management Co (PIMCO), the firm known for its fixed income expertise, according to Morningstar data.

Now Guggenheim Partners is looking to Europe to continue fueling its growth, which may result in additional products for asset management clients looking to diversify outside of U.S. fixed income as interest rates are expected to rise.

Guggenheim Partners this month opened a London office focused on real estate investing and plans to expand its direct lending to middle market companies in Europe. While both efforts stem from opportunities the parent company sees to grow outside of asset management, it could result in products for fund investors looking for alternatives outside of the U.S., consultants said.

Ultimately, Guggenheim wants to boost its profile with retail investors, which makes up about 25 percent of its business.

"We used to joke that we were the best kept secret in the investment management business," Scott Minerd, chief investment officer of the firm, told Reuters in an interview. "That is what we are trying to change."

ATYPICAL BOND FUNDS   Continued...

 
Scott Minerd, Chief Investment Officer at Guggenheim Partners, takes part in a panel discussion titled "Global Overview" at the Milken Institute Global Conference in Beverly Hills, California April 29, 2013. REUTERS/Gus Ruelas