First Union Corp. is highlighting the work of its institutional asset managers by putting them in a separate division.
Charlotte, N.C.-based First Union, which manages $67 billion of assets, said Monday that it is putting $16 billion managed for institutional clients in a new division called First Capital Group.
The move comes six months after the creation of First Investment Advisors, which manages $26 billion of assets for First Union private clients.
First Capital handles accounts for pension and other retirement plans as well as charitable, government, and educational institutions and organizations, many of which have tax-exempt investments.
"What it does is give everybody a clear mandate that they are serving this marketplace," said Donald A. McMullen Jr., the executive vice president in charge of First Union's capital management group. "I'm a focus nut-the more people focus, the better they become at it."
First Union executives discussed plans for the new group for months with current clients.
Before launching First Capital, First Union ensured its performance records complied with standards set by the Association for Investment Management and Research. Such compliance is increasingly demanded by institutional clients.
"We've been doing a lot of work to really establish a powerful asset management company. We really want to invest in the asset management business," Mr. McMullen said.
Other banks, including NationsBank Corp. and Chase Manhattan Corp., have founded asset management divisions with the hope that distinct identities will help them compete.
"It basically illustrates a commitment to put resources in place to compete not only with other banks, but other national and international investment firms," said Norman R. Lubin, chief executive officer of FMS Consulting in Blue Bell, Pa.
First Union consulted with FMS when reorganizing its investment business around client orientation.
For institutions, First Union offers four core equity strategies, including one that invests in mid-cap stocks with a preference for those of socially responsible companies. Its three fixed-income strategies can put clients' money in instruments with a full range of durations.
