Dipping its toe back into the retail market, Bankers Trust New York Corp. is moving aggressively to build its mutual fund family.

The nation's eighth-largest bank company has filed with the Securities and Exchange Commission to advise seven mutual funds that will be sold to the bank's own customers and to those of other financial institutions.

A bank official said regulatory approval is expected within a month.

Bankers Trust currently manages $2 billion in four money-market funds for its private bank and corporate clients. It also has on the drawing board three additional funds that it hopes to register with the SEC by yearend.

The move to increase three-fold its family of proprietary mutual funds highlights the bank company's intensive efforts to diversify its trading-dominated revenue.

Bankers Trust, which has not operated a retail branch since 1982, has focused exclusively on wholesale banking for the past decade. Despite the mutual fund foray, the bank has no plans to reenter traditional retail banking, company officials said.

Though widely considered one of the nation's strongest bank companies, Bankers Trust has been criticized for heavy reliance on trading foreign currencies, equities, and derivatives such as swaps and options.

The company, however, was a pioneer in managing index funds for institutional clients. For about two years, it has been exploring ways to collect fees from new audiences through mutual funds.

Bankers Trust earlier this year recruited Rodger Lawson, the former president of Fidelity Investments retail services group, to advise it on developing retail products and strategies.

"We're hoping to really sell our investment services and procesing to banks, insurance companies, brokers, and other mutual fund companies," said George B. Jackson, a senior vice president, at a bank mutual fund conference this week.

Bankers Trust manages $140 billion of assets for individuals and institutions worldwide, less than 2% of which is in mutual funds.

Analysts applauded news of the SEC filings.

"Their overall strategy is to try to use their abilities in risk management . . . in developing retail products and services, which they would try to wholesale in the marketplaces," said Raphael Soifer, an analyst at Brown Brothers Harriman in New York.

According to Mr. Jackson's presentation earlier this week, the company's mutual fund family will include five money-market funds, an equity index fund, a large-cap and mid-cap growth fund, an international equity and international bond fund, a municipal bond fund, and a short-term to intermediate-term government bond fund.

Hub-and-Spoke Approach

Bankers Trust will continue to distribute the funds through Signature Financial Group, a New York-based company that created a so-called hub-and-spoke approach to fund gathering. It seeks to raise money through various distribution channels and funnel them back to a single manager with oversight of one investment company.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.