NationsBank Corp. plans to fold most of Barnett Banks Inc.'s investment subsidiary into TradeStreet Investment Associates Inc., one of its leading asset management arms, sources said.
The Barnett deal, announced in September, would make NationsBank the third-largest bank in the country, and the consolidation of the units had been expected.
"We are planning to consolidate only the investment management function of Barnett Capital Advisors," said Ann Anderson, a spokeswoman for NationsBank. "BCA will continue as an adviser to the Emerald Funds." The company plans to consolidate the subsidiaries shortly after its shareholders vote this Friday on the merger.
Nevertheless, reports that key people at Barnett Capital Advisors could lose their jobs are making some of the unit's longtime institutional clients antsy.
"We would hope that NationsBank acquired Barnett to gain their expertise," said Bruce Corbitt, pension administrator for the city of Jacksonville Beach. "If the entire team disappeared, it would send up flags. We have had no dealings with NationsBank and we have no reason to believe that they are not capable, but we have no reason to believe that they are capable."
Management of the unit's institutional and mutual fund accounts is expected to be moved to Charlotte, N.C., where NationsBank's TradeStreet is headquartered. Personal trust managers would remain in Florida, but strategic direction would come from St. Louis, where NationsBank's private client group is headquartered, sources said.
Donna M. Terry, the president of Barnett Capital Advisors, is "going to be looking for opportunities outside of the company," said Ms. Anderson. Most of the unit's 90 employees could lose their jobs, sources said.
Jack Ablin, executive vice president and head of fixed income at Barnett Capital Advisors, is going to assume the position of acting president, Ms. Anderson said.
The unit has $11 billion under management, including mutual funds, private trust, and institutional assets. TradeStreet has $53 billion under management.
Glen Baker, finance director of the City of Ocala, one of Barnett Capital Advisors' biggest clients, said he is anxious. The unit manages $70 billion for the city.
"We've been through this before," said Mr. Baker. "We had accounts with Florida National and it was bought by First Union, which afterward raised all the fees."
"We know the people who we are dealing with at Barnett and they are top- notch people," he added. "But we will wait and see what happens. We really don't like this at all."
