Citicorp and Travelers say the company they are creating would be a leading asset management firm, with more than $262 billion of assets under management.

That would vault them past other large U.S. investment managers, including Alliance Capital, American Express Retirement Services, Chase Manhattan Corp., Capital Management and Research, and Putnam Investments.

But Citigroup would lag many others, such as Bankers Trust New York Corp., Barclays Global Advisors, Fidelity Investors, J.P. Morgan & Co., Metropolitan Life Insurance Co., State Street Corp., and Vanguard Group.

Yet the merger between Citicorp and Travelers would combine the banking company's strength in trust and high-end asset management with a powerhouse that grabs assets from several consumer segments.

Travelers has several investment management subsidiaries, including Smith Barney Asset Management and Salomon Brothers Asset Management, which respectively managed about $126.1 billion and $26.3 billion of assets at yearend.

A leading investment product offering of Travelers is its proprietary mutual fund families. Combined, Smith Barney and Salomon manage $46.5 billion of assets in money market funds, $51.8 billion in mutual funds, and $54.1 billion in separately managed accounts.

While Smith Barney's forte has been with retail investors, Salomon Asset Management manages assets for corporations, pension funds, endowments, foreign governments, insurance companies, and some individuals though Salomon Investment Series, a family of mutual funds.

By contrast, Citibank Global Asset Management, which controls $99 billion of the $110 billion of assets under management by Citicorp has a bigger concentration of large accounts. Its clients include government agencies, corporations, banks, insurance companies, pension funds, and wealthy individuals.

Though Citicorp manages about $15.6 billion in proprietary mutual funds, most assets are in separate accounts or other vehicles. About $27.7 billion of the assets are managed for wealthy people.

"There are so many cross-sells in here that people have not even begun to figure it out," said David S. Berry, an analyst at Keefe, Bruyette & Woods Inc., New York.

Noting that all investment services would be available through Citigroup on a global basis, Mr. Berry noted that it would be possible for Salomon Smith Barney initial public offerings to be sold to Citibank private clients and for Salomon's investment products to be sold to the bank's retail customers.

"The big question overhanging this whole merger is, 'Can you really cross-sell?' That goes to the premise of this merger," Mr. Berry said. "The idea of a financial supermarket is seductive but unproven. If you could make one work, this would be it."

Both Salomon Smith Barney and Citicorp draw investment accounts from around the world, but the banking company has a longer tradition of gathering overseas assets. Salomon Smith Barney, which has a domestic stronghold, has recently expanded its international clientele.

Observers said that Smith Barney is close enough culturally to work well with Citibank's clients. They said the brokerage, when it introduced its Track wrap account, was in the vanguard of firms moving away from a business based on transaction fees to advisory fees. Smith Barney has amassed more than $10 billion of assets under management in proprietary as well as outside funds through this program.

"The issue for all of the brokerage firms is to increase the assets that they manage on a discretionary basis. The fundamental shift in brokerage today is from a commission structure to being paid for assets under management," said Michael P. Kostoff, managing director of Advisory Board, a Washington research firm.

Overall, Mr. Kostoff said, the differences in clientele and distribution between Travelers and Citicorp would create a bigger, broader investment services provider.

"The addition of Smith Barney's distribution force to Citibank's global presence could have enormous impact. They do complement each other quite well; there are very few overlapping functions," he said.

By merging with Travelers and, by extension, Salomon Smith Barney, Citicorp is "filling a big gap as far as retail investment distribution," said Douglass Trott, president of Taddingstone Consulting Group, Toronto. "It allows the bank to get more distribution with a customer group it normally doesn't deal with."

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