New Umbrella for First Chicago's Investment Businesses

First Chicago Corp. has restructured the way it manages its investment products and services.

The $65.9 billion-asset banking company announced Monday that it will launch a subsidiary to bring together parts of its investment management and sales businesses that until now had been run as separate units.

First Chicago's mutual funds, pension, and money management divisions will now be under the banner of First Chicago Investment Management Co. The new subsidiary is starting out with more than $25 billion in assets under management.

The unit will serve as investment adviser for First Chicago's proprietary fund family; provide 401(k) and pension services; and provide personal asset allocation accounts.

In the reshuffle, Richard A. Davies, president of First Chicago's investment services unit, will no longer oversee the First Prairie proprietary funds. He will hand that task over to Marco Hanig, formerly head of corporate strategy.

Mr. Davies remains in charge of the banking company's retail brokerage and also has been named a managing director of the new subsidiary. In this new post, he will be responsible for personal investments.

J. Stephen Baine, president of First Chicago Investment Management Co., said a stand-alone subsidiary would give more "visibility" than a division of the bank and should foster a "professional investment management culture."

"The easy money days of the '80s are gone and in the '90s you need a strong team to manage money," Mr. Baine said in a telephone interview. "This way we can share resources and learn from one another."

This isn't the first time First Chicago has repositioned itself in the investments arena. Six years ago the company decided it wanted out of the pension business and sold its investment management subsidiary, First Chicago Investment Advisors, to one of its principals who formed Brinson Partners, Chicago.

By launching this new subsidiary, First Chicago hopes to position itself as a formidable player in the booming area of 401(k) planning, Mr. Baine said.

"This is a significant area of growth for us," he said.

In addition to its 14 retail Prairie Funds and four Prairie Institutional Funds, the banking company also is unveiling a new Investment Architect Account. This product is an asset allocation account that uses First Chicago's proprietary mutual funds as the underlying investment vehicles.

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