The pending acquisition of Transamerica Fund Management Co. by John Hancock Mutual Funds could lead to consolidation of some of the tax-exempt mutual funds managed by the two companies.
"There's a possibility that some of these could be merged --there's deftnitely some overlap," said Renee Lynch, a John Hancock spokeswoman.
Monday, John Hancock said its holding company, Berkeley Financial Group, will acquire the Transamerica Management mutual fund subsidiary of Transamerica Corp. for approximately $100 million.
The transaction, subject to the approval of Transamerica trustees and shareholders, is expected to be completed by yearend.
Ten of the 17 muttml funds managed by Transamerica could be merged into John Hancock funds, Lynch said.
Based in Houston, Transamerica Management manages approximately $736 million in tax-exempt assets. The company has three municipal bond funds: a national fund, a high-yield fund, and a California fund. In total, the company manages $3 billion in its 17 mutual funds.
John Hancock manages $11.5 billion in 31 open-end funds, nine closed-end funds, and institutional and private accounts. Its tax-exempt assets total $872 million in five funds -- two national funds, a California fund, a Massachusetts fund, and a New York fund.
The combined companies would have more than one million investors.
John Hancock's mutual funds are marketed primarily through brokers and financial advisers. The funds also are sold by John Hancock insurance agents.
Transamerica funds are distributed through broken, banks, and its own insurance agents. All of the funds are sold with a sales charge or load.
The Transamerica acquisition should help John Hancock strengthen its bank distribution, Lynch said. The company also has a strong presence in the West and Southwest, she said.
John Hancock has been in the mutual fund business since 1968. The Transamerica addition is in line with Hancock officials' stated goal of making acquisitions to increase the asset base of the firm's mutual fund operations. The company has tripled in size since 1988 through a specific program of product and distribution expansion and key acquisitions.
The company also has been on a drive to improve customer service.
Previous acquisitions included the purchase of Freedom Funds in July 1992. The purchase added a second national municipal bond fund to the firm's investment stable.
Transamerica entered the mutual fund business in 1991 when it purchased a Houston-based mutual fund management group that managed the Criterion Funds.