FleetBoston Financial Corp. may be poised for its next wave of dealmaking.

The banking company is said to be in talks to acquire the asset management business of Liberty Financial Co., also in Boston, in a transaction that some observers said could cost about $1 billion.

It would be a familiar move for Fleet, which has made no secret of its desire to build up its asset management activities as a buffer to more volatile results in private equity and investment banking. Three years ago, the company bought Quick & Reilly Group and Columbia Management Co., boosting its retail brokerage and fund management businesses.

And Fleet is on the prowl for more. Last week Terrence Murray, its chairman and chief executive officer, told American Banker he was mulling deals for "a couple" of asset managers.

Spokeswomen for Fleet and Liberty Financial declined to comment on the Liberty talks, which were reported in Wednesday's Boston Herald. The newspaper said a deal could be announced as early as next week.

Many observers believe Mr. Murray, who is set to relinquish the chief executive title at yearend, wants to make a big splash before stepping out of his day-to-day operating role. He is to stay on as chairman, however, and play a role in guiding the Fleet's strategic direction.

An inveterate dealmaker, Mr. Murray and a close-knit group of senior executives are constantly considering possible combinations. Fleet has long been thought to be interested in buying Charlotte, N.C.'s First Union Corp., but some insiders have said this deal would be too difficult to integrate.

Still, Mr. Murray's track record has made speculation about Fleet's next move a favorite hobby of New England's market watchers. "Three weeks ago there was a rumor that Fleet was looking to something with John Hancock," said Geoffrey Bobroff, a mutual fund consultant in East Greenwich, R.I.

Asset management has become an increasingly important business for Fleet as it tries to boost fee revenues by gathering more retail client assets.

The company has been tweaking its asset management operations for a year. Last August, it hired Keith T. Banks from the former J.P. Morgan & Co. to be chief executive officer and chief investment officer of Fleet Asset Management, a new unit that would include Fleet Investment Advisors, Columbia Management Co., and the Galaxy mutual funds, as well as Fleet's institutional sales unit and its retirement plan services operations.

Fleet has been moving employees of its branch-based brokerage sales force under the Quick & Reilly umbrella and has been training the brokerage people to emphasize financial advisory services over transactional services. Last month, it fired Robert Ash, head of its proprietary Galaxy Funds unit, as part of the continuing reorganization of the asset management group.

Liberty's asset management arms include Chicago's Stein Roe & Farnham and Liberty Wanger Asset Management; Portland, Ore.'s Crabbe Huson Group; San Francisco's Newport Fund Management; and Boston's Colonial Management and Liberty Asset Management Co. Collectively, the units manage about $50 billion of assets.

In May Liberty Financial arranged the sale of its annuity operations, Keyport Life Insurance Co. and Independent Financial Marketing group, to Canada's Sun Life Financial Services for $1.7 billion of cash.

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