With $20 Billion in Assets, Strong Aims to Add More
MENOMONEE FALLS, WIS. — In the two decades since its creation, Strong Capital Management Inc. has amassed 30 mutual funds, a batch of highly touted fund managers, and more than $20 billion in mutual-fund and other assets.
But company founder Richard Strong wants more.
He envisions the firm one day being a "major worldwide financial institution."
Although several paces behind leader Fidelity Investments, with about $450 billion in managed assets, the firm has progressed rapidly in recent years. In mutual-fund assets alone, Strong ranks 34th among more than 400 fund families, according to the Investment Company Institute in Washington.
"They've certainly been a very strong success story," says Jon Teall, a spokesman for fund tracker Lipper Analytical Services Inc.
Strong's bucolic headquarters is a short drive from downtown Milwaukee, a city that's become a midwestern hub for mutual-fund management. With the exception of perhaps Boston, "there are more mutual funds managed in Milwaukee, per size of population, than any other place," says A. Michael Lipper, president of Lipper.
He says that when Strong wants to make a trade, because of his purchasing power, "he is likely to get better service than some small money manager in Boston or New York."
Strong's fund family includes no-load stock, bond, and money-market offerings. Some of its growth-stock funds, including the Discovery Fund, run by Strong himself, tout high long-term returns. (Discovery has hit some hard times this year, however.) Its bond and money market funds also rate well.
Strong is known as a "momentum" player, favoring fast-rising growth stocks. But he says the firm has funds for all types of investors. He's brought several more value-oriented stock funds into the fold in just the past year or so. Analysts see these "plain-vanilla" additions as an effort to appeal more broadly to 401(k) retirement investors.
Moving forward, one of the company's biggest assets is its structure, says Bob Bukowski, president of Alpha Consulting Group Inc., in Milwaukee. Unlike a lot of financial institutions, Strong's fund managers are given lucrative incentives, including ownership, and a great deal of autonomy, he says.
Strong, who owns 80 percent of the company, says its success depends on execution, that is, giving investors both good returns and service. "We have to be 100 percent execution-minded from here, and [investors] will come to us."