Fleet Asset Management is weighing a name change as it plans to achieve national distribution and name recognition after its purchase of Liberty Financial's asset management subsidiaries, according to Keith Banks, chief executive officer of the FleetBoston unit.
The asset management division would develop a national brand identity separate from that of FleetBoston Financial Corp., its banking parent, Mr. Banks said.
Executives at Fleet Asset Management will spend the next several weeks developing a branding strategy that includes the new subsidiaries, he said. And there is a "pretty high possibility" that they will decide to change the division's name.
Christopher Mutascio, a bank analyst at Legg Mason Wood Walker in Baltimore, said any move the Fleet asset management arm makes to distance itself from its parent would be a help since banks still have difficulty persuading customers that they can manage assets effectively. The highest-profile exception is Mellon Financial Corp.'s mutual fund subsidiary Dreyfus Corp., Mr. Mutascio said, and this is largely because Dreyfus was a well-known name before Mellon bought it in 1994.
Some other banking companies also understand the value of a separate asset management identity. Cleveland's KeyCorp, for example, renamed its asset management subsidiary Victory Capital Management last May.
At the same time, FleetBoston's heft as a bank player could help the asset management unit get in the door at the major regional brokerages and wire house firms, said Louis Harvey, president of the Boston mutual fund research company Dalbar Inc.
"Liberty didn't have the financial credibility that it would take to become part of [brokerages'] distribution program," Mr. Harvey said.
Fleet's seven new asset management subsidiaries are: Colonial Management Associates, Stein, Roe & Farnham Inc., and Liberty Asset Management Co., all in Boston; Chicago's Crabbe Huson Group and Liberty Wanger Asset Management; and Newport Pacific Management and Progress Investment Management Co. in San Francisco. The banking company also owns the Portland, Ore.-based asset manager Columbia Management Co., which it bought in 1997.
Having a variety of management styles and products distributed by a single wholesaling force will help Fleet create an array of packaged investment products that can be tailored for institutional, retail, and high-net-worth customers, Mr. Banks said.
"What's really driving the deal is not cost savings," he said. "What we want is to have one plus one equal three."
To create those kinds of opportunities requires that a strong degree of investment autonomy be preserved among the subsidiaries, Mr. Banks said. Two Fleet intermediary distribution executives, James Tambone and Lou Tasiopoulos, are to determine what products would make a good fit if packaged, he said.
In the past Fleet's subsidiaries have generally been responsible for their own sales, but now the combined wholesaling force of about 65 people, some of whom will be based in New York, will sell all the products Fleet offers, Mr Banks said.
Despite the many investment companies under the Fleet umbrella, there is very little overlap among them in investment styles, Mr. Banks said. He said he does not expect layoffs or much consolidation among the companies, other than in wholesaling.
Having national reach would give Fleet Asset Management a much easier time recruiting talent, Mr. Banks said. Like its New York brokerage subsidiary Quick & Reilly, Fleet is in the market to hire throughout the division, he said.
"In a period of general retrenchment, we are still moving forward, albeit cautiously," Mr. Banks said.
The combination of the Liberty units' $47 billion of assets under management and Fleet Asset Management's $30 billion in the Galaxy Fund family, gives Fleet a total of $170 billion of assets under management, Mr. Banks said. Roughly half of that is equity assets, 30% fixed-income assets, and 20% money market funds, he said.
FleetBoston paid $900 million in cash and assumed $110 million of revolving debt to buy Liberty Financial's asset management units. Liberty also sold its annuity and bank marketing business to Sun Life Financial on Nov. 1. Boston-based Liberty Mutual Insurance Co. owned Liberty Financial Companies Inc.
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