KeyCorp of Cleveland has merged its mutual funds with those of McDonald Investments, a regional brokerage it bought last year.
The merger, completed Monday, gave KeyCorp's Victory Funds a $3.2 billion-asset infusion. The fund family has 39 portfolios and $17 billion of assets under management. Keycorp bought McDonald, also based in Cleveland, in October.
The combination with McDonald's Gradison Funds patched up some weak spots in the Victory family.
For instance, after a KeyCorp small-cap portfolio manager left last year, the managers of a similar Gradison fund had been handling both portfolios, said Kathy Dennis, senior managing director of KeyCorp's investment products group. Now those portfolio managers have just one fund to manage.
Victory also gained an Ohio municipal bond specialist from the Gradison side. Steve Dilbone of Gradison and Paul Toft of Victory now cover the state.
"This gave us some asset management capability that we pretty much needed," Ms. Dennis said.
The merger came in two steps: Five Gradison funds joined Victory last week, and the last two were merged into the family Monday.
Gradison had nearly $1 billion of assets in long-term mutual funds and $2.2 billion in a money market fund. They were named for Gradison & Co., which merged with McDonald in 1991.
The reorganized funds are: Fund for Income, Diversified Stock, Small Company Opportunity, International Growth, Ohio Municipal Bond, Gradison Government Reserves, and Established Value. They are offered in a G share class, which has 12(b)1 fees.
All but two funds kept their Gradison managers.
The Diversified Stock Fund, managed by Larry Babin of Victory, absorbed Gradison's Growth and Income Fund, which was managed by Julian C. Ball.
Both families had outside advisers for their international funds, Ms. Dennis said. And the merged fund-managed by Conrad Metz and Les Globits, both of Key Asset Management-uses Victory's subadviser, Paris-based Indocam.
The Small Company Opportunity Fund is managed by William J. Leugers, Gary Miller, and Daniel R. Shick, all from Gradison. The three also manage the Established Value Fund.
C. Stephen Wesselkamper and Tom Seay, both from Gradison, continue to manage the Gradison Government Reserves Fund and the Fund for Income, respectively.
Key Asset Management manages $73 billion of assets.
