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CAN SANDY WEILL'S DAUGHTER PEP UP SMITH BARNEY'S MUTUAL FUNDS?

Says Jessica M. Bibliowicz: `It's nice to have this stuff in your blood'

Until 1993, Smith Barney Inc. was a faint blip on the mutual-fund industry radar screen. For all its haughty advertising about making money the old-fashioned way, the prestigious Wall Street firm was well behind its peers, with just $9.7 billion in fund assets and an embarrassing shortage of top-performing funds.

Then Jessica M. Bibliowicz, at that stage a 34-year-old marketing whiz, showed up. In 1994, she left the top sales post at Prudential Securities' mutual-fund subsidiary and took the job of rebuilding Smith Barney's funds, just after its merger with Shearson Lehman Brothers. Now managing $74 billion in assets and the nation's ninth-largest fund group, Bibliowicz is turning a laggard into a tough competitor. Her goal? To become the sixth-largest fund company within three years, with more than $100 billion in assets. ``The incredible power of this company has not yet been tapped,'' she says.

She faces an uphill battle: Most brokerages have been losing mutual-fund market share for a decade. But she has a solid track record--and numerous fans, including her father, Sanford I. Weill, the chief executive of Smith Barney's parent company, Travelers Group Inc. ``She'll never get the label off her back'' that she's Sandy Weill's daughter, says Michael Downey, her former boss at Prudential. But ``it's obvious she didn't get that job just because of her father....She's a terrific motivational leader.''

``TOURIST ATTRACTION.'' One of two Weill children at Travelers--her older brother Marc is chief investment officer--Bibliowicz was brought up in the world of investing. ``It's nice to have this stuff in your blood,'' she says. She started out as a sales representative at American Express Co. in 1981, avoiding working directly for Weill until joining Smith Barney in 1994. ``I wanted to prove myself without my father's help,'' she says. When she came to Smith Barney, some employees were skeptical, but attendance went up at staff meetings. ``I was the tourist attraction,'' Bibliowicz says. Personable, articulate, and strong-willed--just like her father--she and Weill are close. Bibliowicz says her father dotes on her children, 7 and 5. But at work, she respects the chain of command, reporting to Smith Barney Chief Executive James Dimon.

As a key player in one of the fund industry's biggest gambles, her toughest test is yet to come. Earlier this month, Smith Barney began selling 2,700 no-load funds alongside its own proprietary funds, marking the first time a major Wall Street broker has sold no-loads. Smith Barney could see a big drop in both revenues and assets under management if too many customers buy no-load funds, which carry a 1.5% annual ``wrap'' fee instead of the 5% up-front sales loads charged by Smith Barney's in-house funds. ``We're not a proprietary fund company,'' she says. ``We're a fund company period.''

To keep Smith Barney's funds competitive against no-loads, Bibliowicz is gearing up to exploit one of Smith Barney's biggest untapped assets: a network of 37,000 insurance agents and brokers in the Travelers organization licensed to sell mutual funds. That's more than industry leader Merrill Lynch & Co.'s 13,800 brokers. Bibliowicz also created a new group of asset-allocation funds, called the Concert Series, that will become a core offering in the company's 401(k) retirement program.

AXED. Perhaps more important, she has improved the performance of Smith Barney's in-house funds. Three years ago, the firm had only two Morningstar-rated five-star funds. Now, there are seven. Paul Rice, a Morningstar Inc. analyst, says Smith Barney's 70 funds have advanced from being below average in 1993 to ``about average'' through June. Among the funds that Bibliowicz axed: one run by market prognosticator Elaine M. Garzarelli (page 75), who ``made good top-down calls, but didn't back them up with good stock picks,'' Bibliowicz says.

Bibliowicz has now become one of the highest-ranking women in the mutual-fund industry, along with Fidelity Investments' Abigail Johnson, daughter of Chairman Edward C. ``Ned'' Johnson III. And at just 36, she seems to be injecting into Smith Barney some decidedly newfangled thinking.

By Geoffrey Smith in New York


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Updated June 14, 1997 by bwwebmaster
Copyright 1996, Bloomberg L.P.
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