NationsBank Unit Emulates Nonbanks In Drive to Build Managed Assets

NationsBank Corp. is pounding the pavement to attract new business for its recently formed asset management unit.

Andrew M. Silton, president of NationsBank's TradeStreet Investment Associates, was in New York late last month to woo business from pension funds and midsize corporations.

But TradeStreet, with $31 billion under management, has a long road ahead of it trying to build up its name as a credible independent money manager, Mr. Silton conceded.

Banks have been cast as poor money managers that have been unwilling to attract and retain the high-level talent needed to generate strong performance.

"We make sure our culture and structure doesn't look like that of a bank," Mr. Silton asserted.

He said he expects the unit, formed in November, to book $40 million to $45 million in revenue this year. The company also will be reporting its profits and losses separately from those of NationsBank - a move calculated to heighten managers' sense of accountability for TradeStreet's success or failure, Mr. Silton said.

TradeStreet is also trying to prevent turnover among staff members - a chronic problem at many bank-owned firms.

The unit's 75 portfolio managers and staff members have salaries comparable to those at nonbank money managers and their bonuses are tied to investment performance, Mr. Silton said.

"Money management is a collection of people and investment products that must be retained," he said. Clients "are hiring us to manage money for the long term and are looking for structures that give employees incentives to stay."

To hit its revenue goals, TradeStreet will have to bring on significantly more new business this year, Mr. Silton said.

Right now, most of the accounts TradeStreet manages have been moved over from other divisions of NationsBank. Indeed, half of TradeStreet's assets under management come from the banking company's proprietary NationsFunds mutual fund family.

Mr. Silton said TradeStreet is targeting the Fortune 500 companies that make up the core of NationsBank's institutional clientele. But to differentiate itself from competitors, Mr. Silton said, the unit focuses on the financial needs of different industries.

TradeStreet's money managers are split into teams that specialize in sectors such as utilities, health care, and insurance.

"It requires money managers to understand clients a whole lot more and understand the liability the client is trying to fund," Mr. Silton said.

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