Mellon to Put Dreyfus Brand On All Units For Investing

Mellon Bank Corp. said Thursday that it has combined all of its investment businesses, with a total $330 billion of assets, under the Dreyfus banner.

By harnessing the powerful brand name of the mutual fund company it bought four years ago, Mellon hopes to "raise awareness among individual and institutional investors of the breadth and depth of our money management business," said Christopher M. Condron, Dreyfus' chief executive officer.

All told, five divisions have been brought into the Dreyfus fold: mutual funds, institutional investments, brokerage, retirement services, and private asset management. They include long-established Mellon units as well as companies that the Pittsburgh banking company has acquired since 1993, when it began an aggressive buildup in asset management with the purchase of Boston Co., an institutional specialist.

By aligning the investment businesses' identity with Dreyfus rather than with Mellon, observers said, Mellon appears to be facing up to a big challenge for banks in the field.

"Banks are trusted but not seen as competent, whereas Wall Street is seen as competent but maybe not very trustworthy," said Richard Evans, president of Evans & Associates, a branding consultant in Weston, Conn. The move puts the bank's investment activities "more in the arena of the brokerage houses and mutual funds, and away from banks."

Mr. Evans added, however, "I'm surprised they didn't do it sooner."

"It shows that there was additional hidden value to the Dreyfus acquisition, which was under-appreciated at the time" of the deal, said Michael Mayo, an equity analyst with Credit Suisse First Boston in New York.

Combining the businesses is something of a balancing act. Observers noted that most of the companies Mellon has acquired have strong reputations of their own.

Founders Funds, for instance-a $7 billion-asset mutual fund family that Mellon acquired in April-has "a certain cachet, particularly in the area of growth," said Burton J. Greenwald, a mutual fund consultant based in Philadelphia.

Acknowledging this, Mellon has agreed to let each firm under the Dreyfus umbrella retain its current corporate name and its legal and management structure. For Founders, the most visible change will be the incorporation into its logo of Stephen the lion, the Dreyfus Funds' widely recognized mascot.

Mellon chairman and chief executive officer Frank V. Cahouet, interviewed at a recent industry gathering in Vienna, said he saw a need for merger partners to preserve their own strengths.

"Every company you're interested in joining forces with has a different culture, but it's a successful culture," Mr. Cahouet said. "To try to ignore that is in a way to destroy value."

The five companies to be marketed under the Dreyfus name are:

Dreyfus Funds, including the Dreyfus Corp. portfolios, totaling $100 billion, and the Founders Funds.

Dreyfus Institutional Investors, made up of six Mellon subsidiaries including Boston Co. Asset Management, plus Pareto Partners, a London firm that is 30% owned by Mellon.

Dreyfus Retirement Services.

Dreyfus Brokerage.

Mellon Private Asset Management, including the $75 billion private assets and trusts and Laurel Capital Advisors, Mellon's original equity management arm.

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