Employing a blend of experience, intuition and nerves of steel, 54-year-old Robert Sass has taken the country's only mutual fund beyond the expectations of directors at Boston-based Pioneer Group when they charged him with introducing the Pioneer First Polish Trust Fund in July 1992.
"I knew it had to happen," boasted the otherwise self-effacing Wisconsin native. "To have this kind of success in a market that is untapped and unproven. It's a wonderful feeling of satisfaction."
Since its inception, Pioneer's Polish operations have raised more than $1 billion in assets. Its more than 500,000 investors equal about half of the parent company's combined customer pool spread over 23 funds in the U.S.
Pioneer now manages an estimated 10% of the savings held by Poland's 38.5 million people and in June signed a deal with the country's postal service to create a first-of-its-kind distribution network and raise the company's points of sales and service to nearly 8,000 nationwide.
An aggressive $3 million television and print campaign-perhaps the largest ever in Poland to support a single brand-helps reinforce the message of long-term investment and security in a country obsessed with capital markets, thanks to a dramatic bull run on the Warsaw Stock Exchange. During the 15-month flurry that ended in March, share prices jumped more than 700% and turned a nation of passive savers into stock players bent on big gains.
"They define their objectives clearly and allow us to push the creative as far as we can," said Ed Russell, director of Leo Burnett's Warsaw operation. The agency created two spots featuring a fund representative offering characters from Polish folktales a chance for financial security.
A third spot, a take-off of "Fiddler on the Roof," starred a man like Tevye, the father, dancing on the roof of a straw hut and singing "If I Were a Rich Man." The Pioneer rep turns up and invites him down from the roof. In the next scene, Tevye is back on the roof-but now on a mansion.
"Pioneer makes your money grow" was the tagline in all the spots.
Mr. Sass' confidence was put to the test when an influential daily ran a scathing editorial about Pioneer's investment concept on the eve of the fund's introduction. And after six months, Mr. Sass had to convince his colleagues back home to hang on even though just 1,700 account holders invested only $2 million that first year.
Mr. Sass recalls, "They kept saying, `We've invested a lot of money, but where are the assets?"'
"I told them the only way we could fail would be to fold the operation."
It was about that time the bulls began running in Warsaw. The stock boom allowed Pioneer to demonstrate its ability to outperform interest paid on savings at local banks pegged to the country's 37% annual rate of inflation. Sales grew steadily in 1993, with assets under management ballooning to more than $400 million through December. A further surge in January, when term deposits at banks came due and people rushed to put the money into fund accounts, pushed registrations to more than 18,000 per day.