Commerzbank AG is hunting for a joint-venture partner in the United States as part of its effort to increase the amount of assets under management it gets from cross-border sales.

Friedrich Schmitz, the Frankfurt company's head of asset management, said he is disappointed that cross-border sales had produced only 1% of its $121.6 billion of assets under management as of May 31.

He said he wants cross-border sales in Europe alone to account for 20% of the company's assets under management by 2005. The company will not set a target figure for the United States until it finds a partner there, a spokesman said.

Right now Commerzbank has $10 billion of U.S. assets under management, all in its Montgomery Asset Management subsidiary.

Contrary to published reports, the company said it is not seeking to sell Montgomery, the San Francisco firm it bought March 1997. It also says it does not want to buy another asset manager nor does it want to use Montgomery as the sole vehicle for expanding its U.S. distribution.

Mr. Schmitz said that Commerzbank would rather find a joint-venture partner through which it can sell its funds and other investment products in the United States, while it sells the partner's products in its European market.

"We're not giving up on the U.S. - we just want to take a different tack," Commerzbank spokesman Dennis Phillips said.

Mr. Schmitz would not name names, but he said the company is "negotiating intensely" with several U.S. candidates.

Commerzbank said it is also working to streamline its European cross-border selling. Right now it sells its investment products in Europe through several subsidiaries - ADIG Investments in Germany and Luxembourg, Jupiter Asset Management in England, and Caisse Centrale de Reescompte in France.

Montgomery has some work to do, Mr. Phillips said. By March 2000 its assets under management had grown 50% from the time it was purchased by Commerzbank, to $12 billion. However, since then it has lost $2 billion of that because of its investments in high-tech companies.

Mr. Phillips said the company plans to pare the unit's costs by 14% this year but is still deciding how this will be done.

Analysts say that they are skeptical about Commerzbank's new strategy and that the company lacks the product range needed to be a successful global cross-seller of investment products.

"Local asset management companies have a huge home field advantage," said Michael Klein, a Frankfurt bank analyst for Credit Agricole Indosuez. "There is no reason for customers to listen if a [foreign] company comes in and says, 'Here we are. Buy our products.' "

Jeroen Julius, a London banking analyst at Fox-Pitt, Kelton Inc., said overall interest in mutual funds, and fund flows as well, have declined dramatically in Europe.

Mr. Julius said the bank's strategy "will only work if it has good, attractive products." That is especially true in a poor market for mutual fund sales, as Europe is right now, he said.

However, Mr. Phillips said, the awareness of Commerzbank's brand and those of its fund groups, the company's experience in the European market, and the performance of its funds will overcome those obstacles.

The company's initiative is designed to offer customers more options, he said. "We believe our funds have a strong track record and are well-positioned. If we offer the Jupiter funds in Italy, Germany, and France, they will sell. It's just a matter of getting the product out there."

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