1st Union Inches onto Global Stage With Deal for London Asset Manager

First Union Corp. is taking a small but potentially significant step into investment management overseas.

The Charlotte, N.C., banking company has agreed to buy Analytic-TSA International Inc., a London-based fixed-income firm with $156 million of assets under management.

The planned purchase, apparently First Union's first outside the United States, would add a new facet to the international operations it acquired in April with its $16.6 billion purchase of CoreStates Financial Corp.

The transaction is expected to close next month. Terms were not disclosed, but sources said a fixed-income boutique of this size would command $1 million to $3 million-a negligible sum for a bank of First Union's heft.

"This is a minor investment in the grand scheme of things, but I would call it an educational investment," said R. Harold Schroeder, a bank analyst with Keefe, Bruyette & Woods in New York.

Amid rising demand for international investments, First Union wanted to expand its team of international asset managers. "This is an important step in building First Union's comprehensive asset management capabilities," said Donald A. McMullen Jr., executive vice president and head of the company's capital management group.

First Union is not alone in eyeing overseas expansion. The Financial Times reported Wednesday that Mellon Bank Corp. is close to a deal for Newton Investment Managers, a British firm that manages $20.5 billion of assets. Mellon declined to comment.

The acquisition of Analytic-TSA would give First Union a platform to build on in the United Kingdom, said Frank J. Barkocy, bank analyst with Josephthal & Co., New York. "They could add critical mass once they have a foothold in that marketplace," he said.

Until it acquired CoreStates, First Union had limited activities abroad, Mr. Barkocy noted. CoreStates, however, is a substantial trade financier, ranking No. 2 in processing U.S. checks for international companies and No. 6 in issuing letters of credit, he said.

Upon completion of the deal, the London fixed-income firm would be rechristened First Investment Advisors Ltd. It would continue to specialize in international and emerging market debt research and fixed-income portfolio management.

Five London-based investment professionals would report to Alan R. Adelman, a principal of Analytic-TSA who would become chief investment officer of First Investment Advisors.

Mr. Adelman said Wednesday that the coming European Monetary Union is expected to foster debt issuance by municipalities and local issuers in Europe. "There's also a tremendous level of growth in corporate bond issuance because of corporate shifting their borrowing from the banks to the capital markets."

Analytic-TSA International is a unit of Analytic-TSA Global Asset Management, Los Angeles, which in turn is a unit of Boston-based United Asset Management.

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