Geier Financial expanding into mutual fund business

Marriottsville firm launches Geier Strategic Total Return Fund

  • Thomas M. Geier (left) and Joseph N. Geier, founders of the Geier Strategic Total Return Fund
Thomas M. Geier (left) and Joseph N. Geier, founders of the Geier… (Baltimore Sun photo by Barbara…)
January 25, 2011|By Hanah Cho, The Baltimore Sun

Joseph N. Geier established his namesake financial services firm in Howard County by cultivating an exclusive client list of professional athletes: Baltimore Orioles legend Cal Ripken Jr., New York Yankees first baseman Mark Teixeira and Philadelphia Phillies pitcher Brad Lidge.

Over the years since it was founded in the 1990s, Geier Financial Group expanded the business by managing the money of other wealthy clients and high-net-worth retirees in Maryland.

Now Geier is getting into the competitive mutual fund business, having recently launched a new product intended to appeal not only to the firm's wealthy clients but also to mom-and-pop investors.

"We wanted to open up our firm and strategy to everyday investors: a schoolteacher, a fireman," said Geier, the company's president. "Any person out there could invest in our fund … and we looked at that as a benefit to potential new clients and to the firm in terms of the growth strategy."

The Geier Strategic Total Return Fund became open to investors last month under the firm's Geier Asset Management division. The fund's managers intend to heavily invest in bonds while also adding in the mix some stocks, exchange-traded funds and real estate investment trusts, or REITS.

The Geier fund faces a crowded market. Thousands of fund products are vying for clients, who are returning to the stock market after two years of withdrawing record amounts from their investments amid the financial sector meltdown. Moreover, hundreds of new funds are launched each year, including nearly 600 last year, according to mutual fund tracker Lipper Inc.

New players in the mutual fund business also face distribution and marketing challenges, said Jeff Tjornehoj, a senior research analyst at Lipper. But Geier's fund can capitalize on its regional name recognition and celebrity clients, an advantage that many small firms don't have, Tjornehoj added.

Unlike more traditional mutual funds that seek to generate returns that are better than benchmarks, such as market indexes or groups of peer funds, the Geier fund will focus on "making the clients' bottom line grow," said Thomas M. Geier, Joseph's brother and the firm's vice president and chief operations officer, who will manage the new fund.

That means the fund aims to yield positive returns regardless how the stock market fares. The firm's "absolute return" approach allows Geier managers to use derivatives or short selling during a market downturn to avoid losses.

Given huge hits on pensions and retirement savings during the recession, absolute return funds are "generating a lot of interest from advisers and more sophisticated investors," Tjornehoj said. "When it comes to product development, right now, absolute return is in play," he said, noting that big money manager PIMCO manages the best-known absolute return funds.

Thomas Geier said the fund's absolute return strategy would help differentiate it from competitors. Plus, the firm has a track record with that approach, which would help sell its new mutual fund to financial advisers and investors, he said.

The Geier firm has managed $26.6 million of its clients' assets during the past nine years, using techniques and strategies that are substantially similar to the fund's. That portfolio posted a gain each year and had a 7 percent gross return during the nine-year period, according to the fund's prospectus.

That portfolio's assets under management have been moved to the mutual fund, which now has $27.5 million in assets.

After a topsy-turvy market, investors are looking for less risk and volatility, Thomas Geier said.

"When you talked to people five years ago, they wanted 10, 15 percent return. Nowadays, 7 percent return is very good. People want low risk. They tell us, 'I'm tired of the rollercoaster of the stock market,'" he said. "We want to present ourselves as a conservative firm that cares about our clients and the ultimate growth of their portfolio."

While the firm developed its reputation by overseeing the financial affairs of professional athletes, Joseph Geier said the company's future is to increase assets under management. Geier Financial Group now manages about $180 million in total for its clients.

Joseph Geier would like to see the mutual fund grow to $1 billion in assets and eventually would like to add one or two more mutual funds to the firm's offerings. He said the firm isn't likely to become the size of Baltimore-based T. Rowe Price Group or other large mutual fund houses.

But, he said: "We'll be happy with two or three funds under our umbrella."

Geier Financial Group:


Employees: 16

Assets under management: $180 million total

Geier Strategic Total Return Fund: $27.5 million in assets

Professional athlete clients include: Cal Ripken Jr., Mark Teixeira, Brad Lidge, Melvin Mora, Jerry Hairston Jr., David Segui, Eddie Murray, Ken Singleton, Jake Westbrook, Willie Randolph, Steve Finley, Jeff Ballard, Chad Bradford, Charlie Hayes, Eric Young, Eric Young Jr., Dennis Martinez, Shane Reynolds, Reggie Sanders, Armando Benitez.

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