Pioneer Hires Salomon to Mull Alternatives
Pioneer Group Inc. has hired Salomon Smith Barney Inc. and Merrill Lynch & Co. to "evaluate alternatives for increasing shareholder value," a spokeswoman said Friday.The company declined to outline the nature of its search.
The announcement came as Pioneer released its fourth-quarter earnings, which showed a return to profitability for the first time since the first three months of 1998. Pioneer reported net income of $4.8 million, or 18 cents a share, on revenues of $64.4 million.
The fund company had been hit with losses stemming from some overseas investments, including a discontinued gold-mining operation and its Polish pension fund unit.
Pioneer's investment management business reported net operating income of $9 million during the fourth quarter, a 47.54% increase from the 1998 period, and worldwide assets under management were $24.5 billion, up 4.7% from a year earlier.
"From their basic mutual fund business they've done a pretty good job," said Geoffrey Bobroff, a mutual fund consultant in East Greenwich, R. I. "But they still are faced with some serious challenges as a mid-sized player," he said.
- Cheryl Winokur
Bank Fund Sales Rose in December
Bank sold more mutual funds in December, after four months in which sales were flat or declined, according to a study.The typical bank took in $53 of revenue from mutual funds sales for every $1 million of retail deposits, up 41% from November but still down 21% from July, according to the study, conducted for the Bank Securities Association by Kenneth Kehrer Associates Inc. of Princeton, N.J.
Sales of fixed annuities dropped 26% from November to December, while variable annuity sales increased 10%, according to the study.
Increased mutual fund sales helped brokers working at banks bring home 9.6% more in commissions in December than in November, the study said.
However, broker productivity at banks still lagged that at nonbank brokers, said Kenneth Kehrer, the author of the study.
- Amy L. Anderson
Principal Plants Flag in India Market
Principal Financial Group, Des Moines, on Friday acquired a 50% stake in IDBI Investment Management Co. of Bombay, the asset management arm of Industrial Development Bank of India.IDBI will be renamed IDBI-Principal Asset Management Co. and will sell mutual funds in India, targeting young couples planning for retirement. Principal's initial investment in the venture is $15 million.
Norman R. Sorensen, president of Principal's international unit, said that the move anticipated reform legislation in India - expected in the next two years - permitting individual pension funds.
He said Principal signed a letter of intent with Bank Mandiri of Indonesia to launch a similar project in that country.
Principal has over $113 billion of assets under management. Industrial Development Bank has over $17 billion.
TD Waterhouse Group, the New York-based brokerage unit of Toronto-Dominion Bank, recently kicked off a joint venture in India called Tata Finance/TD Waterhouse.
- Amy L. Anderson
Pa. Bank Now Offering Investments
BT Financial Corp. of Johnstown, Pa., said Friday that its bank subsidiary has started selling investments.Laurel Bank is offering securities, mutual funds, and annuities through a program run by Los Angeles-based Security First Group and Concord, Calif.-based Bisys Brokerage Services Inc., a subsidiary of Bisys Group Inc. of Little Falls, N.J.
Karen Z. Lovette, financial services sales manager for Laurel, said the bank was seeking fee income and a broader product line. She said seven salespeople would cover the bank's 73 branches.
BT Financial has $2 billion of assets.
- Amy L. Anderson