TAMP wants underlying managers to have a hand in unified managed accounts. Third-party investment platform provider Brinker Capital has selected Managed Portfolio Advisors (MPA), the overlay division of IXIS Asset Management Global Associates (IXIS), to replace Legg Mason's ClearBridge as overlay manager for its year-old unified managed account (UMA) program.

UMAs blend separately managed accounts (SMA), exchange-traded funds and mutual funds in a single account. Overlay management has to do with aligning trading activity, managing cash flow and enhancing the overall tax efficiency of portfolios.

In with the new

Other than to say it selected ClearBridge -- formerly Citigroup's asset-management unit -- before it became part of Baltimore-based Legg Mason at the end of 2005, Brinker isn't saying why it took the firm off the job after having run its $200-million UMA platform for nearly a year.

MPA "is uniquely experienced in the dynamics of managing multi-discipline portfolios," says Noreen Beaman, an executive v.p. at Berwyn, Pa.-based Brinker. "They will add significant value to the UMA investment solutions we can bring to our clients."

Brinker is MPA's third UMA mandate. Late in 2005 UBS picked it to manage its UMA platform; Credit Suisse did the same thing at around the same time. MPA also runs multiple-discipline account programs for a number of big sponsors, including Merrill Lynch, as well as some single-strategy SMAs offered by other IXIS affiliates. A note on IXIS' website says that MPA's $12.5 billion in assets under management includes "assets sub-advised by both affiliated and unaffiliated managers of [IXIS]." MPA is affiliated with more than a dozen asset-management firms under the IXIS umbrella.

The multiple-discipline account is an SMA-only version of the UMA. About two-thirds of MPA's assets under management are in multiple-discipline accounts or UMAs.

Beyond its track record as an MDA manager, Brinker says MPA got the nod because of its ability to stay true to the style and intentions of the UMA's sleeve-level managers.

Differentiator

"We view the UMA first and foremost as a vehicle to provide a better end-client experience, but we also know that [asset managers] are very protective of their intellectual capital," says Beaman. MPA's "ability to adapt to the needs of the underlying investment managers as a key factor in attracting top firms to the program," says Beaman.

MPA closely replicates the management styles of the underlying managers -- something other overlay managers don't always do, according to MPA's president Curt Overway. "We're trying to do what the managers do in the ways they do it," he says. "Often overlay managers take the [underlying managers'] tickers and percentages and just implement them. We're trying to replicate the experiences that the managers provide. That's a key differentiator for us and [a way] of attracting a lot of the top-tier managers."

Although she doesn't name any names, Beaman says that the other overlay managers iBrinker looked at didn't seem as likely as MPA to adhere as closely to the underlying managers' approaches as MPA. In fact, Brinker places such importance on an approach to overlay management that -- directly or at a remove -- stays true to the underlying managers' intellectual capital that it "probably would have done it on our own using a Smartleaf-type technology" if MPA hadn't fit the bill.

Cambridge, Mass.-based Smartleaf provides overlay-management technology to banks, brokerages and registered investment advisories (RIAs) that prefer to manage UMAs in house rather than outsource the overlay to a third party. Seattle-based Tamarac does something similar, though with more of a focus on RIAs. Charlotte, N.C.-based Adhesion Technologies' WealthADV, an RIA business-management platform, includes overlay technology from Boston-based Upstream Technologies.

Brinker manages about $8 billion, mainly in SMA and mutual-fund wrap programs.-FWR

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