The race to gather assets in the fund world is relentless. In this competition, firms need a clear plan for growth. By all appearances, Old Mutual Asset Management has revamped its strategy, looking to trim the fat and gobble up assets by acquiring other managers.

Growing by acquiring
Old Mutual is a relative latecomer to fund management, having entered the business in 2000 with its purchase of United Asset Management Corporation. Since then, the firm has trimmed the number of boutique shops under the Old Mutual name to 16, and it's once again on the lookout for acquisitions. To grow from its current level of $8.5 billion in fund assets to a goal of $20 billion in the next few years, the firm says it plans to acquire boutique shops and sell funds through financial advisors. Old Mutual also stated that it may look to add alternative investments, fixed-income funds, and international portfolios to its product lineup.

At this point, it's not clear whether Old Mutual's plan to more than double its assets through acquisition will work. Buying up smaller firms is one way to increase assets, but at some point, a firm should be able to create sufficient new assets internally, through good fund performance and the attraction of new inflows. This may prove challenging for Old Mutual, since several of the firm's funds are old Pilgrim Baxter funds, which had been tainted by market-timing charges and poor performance.

One of the best from Old Mutual
However, a quick look at Old Mutual's lineup reveals at least one fund apparently worthy of investor dollars: Old Mutual Focused Fund (OBFVX). It happens to be one of the former Pilgrim Baxter funds, but a new name and lowered fees have given it a fresh outlook on the future.

Jerome Heppelmann has run Focused Fund since early 1999, seeking companies across market capitalizations that have sustainable long-term growth prospects and modest relative valuations. In recent years, most of the fund's holdings have tended to be large-cap stocks, landing this fund firmly in the large-blend Morningstar category.

Heppelmann employs a more concentrated approach to investing, holding positions in only a few dozen stocks, which currently include Microsoft (NASDAQ:MSFT), General Electric (NYSE:GE), and 3M (NYSE:MMM). Right now, the fund only owns 28 stocks; if you don't have a taste for a more concentrated portfolio, consider looking elsewhere. Despite its seemingly narrow approach, the fund remains well-diversified across sectors, with industrial materials (22% of assets) and financial services (18%) composing its two largest allocations.

Big bets pay off
Performance here has been solid, with the fund posting an annualized 13.2% gain from its March 1999 inception through June 2007, compared to only 4% for the S&P 500 Index. Much of its performance advantage came in 2000, when it outperformed the S&P 500 by almost 34%. Despite underperforming the index in 2002 and 2005, performance has generally been strong, typically landing the fund in the top quartile of its peer group during most years.

A recent reduction in expenses trims the fund's net expense ratio from 1.44% to a more reasonable 1.15%. Without that reduction, this fund probably would not be worth owning; cutting fees was a wise move on Old Mutual's part. Turnover here is a bit on the high side, at 96%, but the the portfolio's limited number of holdings make this rate seem reasonable. If you have the hankering to own a fund from the Old Mutual lineup, check out the Focused Fund first.

It remains to be seen whether Old Mutual can deliver on its ambitious plans to fuel its growth through acquisition. Some internal asset growth in the next few years would be a much more positive indication of the firm's future. For your part, ensure a sturdy future for your own portfolio by making sure that any Old Mutual funds you own stand up to the stringent requirements of a Foolish fund.

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Fool contributor Amanda Kish lives in Rochester, N.Y., and does not own shares of any of the companies or funds mentioned herein. Microsoft and 3M are Inside Value recommendations. The Fool's disclosure policy is mutual, but never old.