Continental Bank joined the growing ranks of banks offering proprietary mutual funds with the launch of its own fund family on Sept. 1.
The bank's fund family is made up of three money market portfolios: the Prime Fund, U.S. Government Securities Fund, and Treasury Fund.
Continental's 231 Funds, named after the address of the bank's headquarters at 231 South LaSalle Street in Chicago, had $669 million of assets on launch day, according to Timothy F. Jackson, vice president and product manager for mutual funds at the bank.
Gauging Customer Needs
While the Prime Fund had $527 million in assets and the Treasury Fund had $142 million, the third fund "did not have the critical mass necessary to launch it" last week, Mr. Jackson said.
Continental expects to make the U.S. Government Securities Fund available within 90 days, he added.
No more funds are planned for 1993, Mr. Jackson said. But bankers are talking to customers about how to satisfy their needs, he said.
Future offerings being considered include short-term funds and equity index funds, said Richard E. Stierwalt, chairman and chief executive officer of Concord Holding Co.
No Retail Plans
The New York-based company will administer the 231 Funds, which will be sponsored and distributed by its subsidiary, Concord Financial Group Inc. The bank will serve as investment adviser to the funds.
Continental, which serves corporations and trust customers exclusively through its wholesale operations, has no plans to offer its proprietary funds on a retail basis.
The 231 Funds were created to allow Continental's customers to combine their cash management, custody, and investment services under the bank's umbrella.
Funds from Conversions
"Our clients need the ability to invest their funds short term," Mr. Jackson said.
The 231 Funds were started partly with money managed by Continental's fiduciaries, and also by converting other investment vehicles the bank already managed, Mr. Jackson said.
"Close to 75% of the fiduciary monies were converted," he said.