Taking a major step in the consolidation of its retail product line, First Chicago NBD Corp. is readying a new family of mutual funds.

The Pegasus Funds, to be launched in August, are being cobbled together from the banking company's two existing lines, the Woodward Funds and the Prairie Funds.

The combined entity, with more than $12 billion in assets under management, would rank among the top 50 U.S. mutual fund companies. First Chicago executives say they are determined to put more marketing muscle behind the funds, given their newfound stature.

"We're as big as Warburg Pincus and as big as Nuveen," said Marco Hanig, managing director of mutual funds for First Chicago Investment Management Co. "We're going to put some serious effort behind building a brand name."

First Chicago plans to advertise the Pegasus Funds under the slogan "Strength in Investing," Mr. Hanig added.

The new effort comes seven months after First Chicago Corp. and NBD Bancorp. merged to create the nation's seventh-largest banking company and the 10th-largest bank-run mutual fund complex.

To help prepare its troops for Pegasus' launch, First Chicago last week held a rally for 400 employees - mostly brokers, trust officers, and investment staff - on the University of Chicago campus.

At the rally, company executives pledged to increase the bank's stock investment research team from six to 14 in the next several months. Similar meetings will be held in Michigan and Indiana to boost employee awareness of the new funds and services.

"We were asking them to understand the benefits and changes of the consolidation, and make sure our customers knew about them," said Richard K. Hawes, president of First NBD Investment Services.

Some observers said First Chicago NBD has a tough road ahead as it seeks to build awareness for its new fund family. "They are going to have to reinvest in a new brand name, in terms of collateral material, signage, and prospectuses," said Les Dinkin, managing principal of NBW Consulting, Westport, Conn. "Clearly they wanted to reposition the new funds, instead of leveraging the heritage of either fund family."

Merger politics may have played a role in prompting the name change. The marriage of First Chicago and NBD has long been pitched as a merger of equals, but NBD executives have taken the upper hand in most lines of business, including brokerage. NBD brought with it $8 billion of mutual fund assets in its Woodward unit, representing two-thirds of the assets in Pegasus.

Against that backdrop, First Chicago NBD chose a new fund moniker "to move beyond the past, as opposed to biasing the organization by picking one name over the other," said Daniel Darst, executive vice president at Optima Group, a Fairfield, Conn.-based consulting firm that advised the bank on the name change.

In addition to revamping its fund unit, First Chicago NBD is also readying a new brokerage program for its merged bank. The company's plans to boost its sales force from 150 to 180 brokers by yearend, said J. Stephen Baine, senior vice president in charge of investment management and services.

"If there was any downside to the merger it's that is was disruptive to our fund sales," Mr. Baine said, "but now our distribution channels are all up and running."

During the first quarter a total of $108 million flowed into the stock portfolios of the Woodward Funds and Prairie Funds; that's a 25% drop from the previous quarter, according to Financial Research Corp., Chicago. The mutual fund tracking firm said three-quarters of the fresh cash came from sales at NBD branches.

Even so, Mr. Baine said the company was opening an average of 100 brokerage accounts a day since January. He would not disclose how many the company had in total.

A plan is under consideration to assemble First Chicago's sales force in teams; for instance, a broker would work with a trust officer and a private banker to serve a particular customer.

Mr. Baine said the company may expand its sales force by training platform employees to sell packaged investment products.

These new Series 6-licensed representatives will give customers little or no investment advice, instead taking them through an automated sales process, such as the one used to determine personal-risk tolerance and investment objectives for First Chicago's Investment Architect asset- allocation product.

"Our central theme is to shift the customer to money management, and not to the latest hot product," Mr. Baine said.

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