In a blow to Signet Banking Corp's. retail mutual fund effort, Michael Freedman, the marketing maven behind its Blanchard funds, has left the company.

Mr. Freedman, who founded the funds in 1986 and sold them to Signet last year, is widely respected as a fund marketing visionary. Without brokers or mass-market advertising, Mr. Freedman used direct mail to build an 11-fund family that at its peak in 1992 had almost $2 billion in assets.

Reached by telephone at his vacation home in East Hampton, N.Y., Mr. Freedman, 54, confirmed that he had left the bank last week, citing personal reasons.

"I'm not a man of overreaching ambition," Mr. Freedman explained. He said he had no immediate plans except to spend more time with his family, hinting he might not sit on the sidelines for long.

"I suspect you'll see me back in the investment business in the future," Mr. Freedman said.

Signet executive vice president, Mr. Freedman had worked in New York, where the Blanchard funds are based.

Analysts cheered last year when Signet, based in Richmond, Va., bought the no-load Blanchard mutual funds for a price estimated between $16 million and $25 million. It seemed an enlightened combination of the bank's expertise in data base marketing with the small fund company's flair for selling funds by mail.

But Blanchard's intellectual capital - especially Mr. Freedman - was seen as the real prize.

"The assets there weren't the main thing - what they really bought was Mike Freedman," said Burton Greenwald, a Philadelphia-based mutual fund consultant. "Whether they realized that, I don't know."

But friction between freewheeling mutual fund executives and their bank counterparts is a well-known phenomenon - especially when fund executives have sold their companies for a hefty profit.

"There's always an issue of what kind of motivation these guys have once you've made them wealthy," said Robert A. Hering, a managing director in Furman Selz's mutual funds division. "The temptation to go to the golf course is much greater."

Plus, there is the challenge of working within a highly regulated industry.

"Banks are a little bit more controlling and not as willing to provide free reign to these guys," Mr. Hering added.

Mr. Freedman acknowledged that running the Blanchard mutual funds as part of a banking company had somewhat dampened the group's entrepreneurial spirit.

But he downplayed the severity of the change. "It wasn't as though I was in a straitjacket," he said.

Blanchard fund assets stood at $586.6 million at the end of June, according to Lipper Analytical Services.

Signet officials hope within two months to name a senior executive to oversee all retail investment products, including its brokerage unit, said Chris Oddleifson, Signet executive vice president for consumer banking.

"I wish he'd stayed, but this is not anywhere near a fatal blow," Mr. Oddleifson said.

In departing Signet, Mr. Freedman acknowledged that he was forgoing "a very handsome salary ... and some substantial benefits."

As part of a retention package, Mr. Freedman was eligible to receive incentive compensation in excess of $1 million paid over four years, Mr. Oddleifson said.

But Mr. Freedman is not worried. "I'm not a poor man," he said.

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