First Union Corp. is laying the groundwork to expand sales of the Evergreen family of mutual funds following a vote last week that gave the North Carolina banking company a green light to manage the products.
First Union is expected this week to dose its deal for the Evergreen Funds' parent company, Lieber & Co., taking over as investment adviser to the $3.1 billion-asset fund family.
Till now, Lieber & Co. has sold the funds directly to consumers, rather than through intermediaries such as brokerage firms and banks.
Considerable Expansion
But once it closes the acquisition, First Union intends to begin marketing the funds through a variety of new outlets, including bank branches, regional brokerage firms, insurance agencies, and financial planners.
"We're going to expand the asset base considerably," said William M. Ennis 2d, senior vice president and director of First Union's mutual fund program.
To accomplish that, the bank is considering several ways of compensating the salespeople who would sell the funds through these new channels.
The options, including the possible introduction of backend, front-end, and level-load sales charges for new investors, were laid out in a proxy statement that was sent to Evergreen Funds investors last month and approved last Thursday.
'Looking at the Possibilities'
In a telephone interview, Mr. Ennis emphasized that "the base of 140,000 shareholders in Evergreen will not be affected by any possible changes."
"We're looking at the possibilities," he added. "It's not ironclad because we haven't finalized the transaction."
First Union has restructured its mutual fund department to prepare for the Evergreen push.
Marc R. Lieberman, a vice president who helped develop and market First Union's own family of mutual funds, will now devote his time exclusively to marketing the Evergreen funds through outside channels.
National Aspirations
Mr. Lieberman plans to initially approach regional brokers, insurance agents, and financial planners, and then broaden the drive to include national brokerage firms.
The banking company will eventually bring on staff, including four mutual fund wholesalers, to assist Mr. Lieberman, Mr. Ennis said.
The approach could pay off for First Union, industry observers said.
First Union "clearly will access a new customer base," said Dennis Dolego, a partner with Financial Research Corp., Chicago.
"The funds have a relatively good performance record to carry to that new market."
In another executive shift, Barbara Colvin, who was vice president of retail investments, will now serve as senior vice president of First Union's capital management group.
The group is responsible for product development, marketing, and administrative services involving the Evergreen and First Union fund families.
The move puts Ms. Colvin in a key management position in First Union's rapidly growing proprietary fund business.
The banking company already manages the First Union Funds, with $3.8 billion in assets as of March 31.
Headed Colonial's Bank Group
Both Mr. Lieberman and Ms. Colvin report to Mr. Ennis, who joined First Union last month from the Colonial Group of Mutual Funds, where he was senior vice president of the bank division.
Lieber & Co.'s general partners last fall approved the transaction, in which First Union will assume investment advisory responsibilities for the 16 funds.
The Evergreen fund complex will retain its Purchase, N.Y., headquarters and staff.
A New Strategy for Fund Sales
To crack new markets for the Evergreen Funds...
* First Union branches
* Regional brokerage firms
* Insurance agencies
* Financial planners
First Union may offer customers several ways to pay sales commissions
Front-end loads:
Customers pay a fee when they buy shares
Back-end loads:
Customers pay a fee when they redeem shares
Level loads:
Customers pay an annual fee while they hold shares
