Dutch banking giant ABN Amro is preparing to enter the mutual fund business through its Chicago-based LaSalle National Trust unit.
The bank is awaiting regulatory approval to launch a family of 16 mutual funds that would be marketed to private banking, trust, and retail customers at ABN Amro's far-flung U.S. outposts.
The funds, which ABN hopes to launch by early December, are expected to open with assets of $1 billion, said Paul I. Kampner, senior vice president at LaSalle National Trust. Eventual sales of $100 million a month are anticipated.
LaSalle National thus joins a growing number of bank companies that see strong fee income outweighing the heavy start-up costs of proprietary mutual funds.
Four Global Fund Included
The palette of offerings planned by the Chicago-based bank is unusually broad. For instance, it includes four global fund, reflecting the bank's international connections.
ABN Amro also has a widespread North American retail network and is likely to expand it further through acquisitions. LaSalle National Trust is owned by LaSalle National Corp., which also houses LaSalle National Bank.
The Dutch bank owns European American Bank in New York and operates 10 agency offices in major U.S. cities.
For the personnel to launch its mutual fund effort, ABN has been drawing from the completion. Mr. Kampner and James B. Wynsma, who is president and chief executive of LaSalle National Trust, were recruited earlier this year from New Jersey's Midlantic Corp.
Still, cracking into the mutual fund business won't be easy. "It's not an uncrowded market," said Geoff Bobroff, senior vice president, Lipper Analytical Services, Denver.
Among banks alone, LaSalle faces local competition from subsidiaries of Northern Trust Corp., First Chicago Corp., and Harris Bankcorp. Each has a mutual fund family or is about to expand or launch one, Mr. Bobroff said.
The Usual Targets
LaSalle is converting about $1 billion of collective trust accounts that it manages -- primarily, employee benefit plans and other commingled trust funds -- to build its mutual fund base.
LaSalle expects to market the funds to traditional trust clients -- generally pension plans or individuals with assets exceeding $500,000.
"The more sophisticated the clients, the more likely they are to need a broader range of investment options," said Mr. Kampner.
But the menu also includes offering tailored to the retail market, including money-market mutual funds that will be sold in branches.
LaSalle Street Capital Management, a unit of LaSalle National Trust, will act as investment adviser to the as yet unnamed mutual fund family. To avoid Glass-Steagall Act prohibitions, SEI Corp. of Wayne, Pa., will be used to sponsor and distribute the funds.