After gobbling up a money manager, Keycorp is hungry for more.

While officials of the Cleveland-based banking company won't go into specifics, they say their appetite is whetted for more deals like the recently announced plan to acquire New York-based money manager Spears, Benzak, Salomon & Farrell Inc.

"Keycorp is committed to building up its asset management enterprise," said chief financial officer James W. Wert.

He added that acquisitions of small to midsize money managers with international, growth, and mid to small-cap equity expertise are the highest priorities.

Keycorp spokesman Bill Murschel added that a strategic plan crafted last summer had targeted "acquisition and development" of money managers, mutual fund complexes, and investment sales channels as a major company goal.

In that respect, Keycorp is like many other major banks, according to consultants and investment bankers.

Kurt Cerulli, principal of Cerulli Associates Inc., said that virtually every bank among the 20 largest bank managers of mutual funds is on the acquisition trail.

While Mr. Cerulli declined to name companies he knows are making bids, the 20 largest bank fund managers include such names as Mellon Bank Corp., Banc One Corp., and Keycorp.

There hasn't been any shortage of acquisitions since Chase Manhattan Corp. kicked off the current flurry with its purchase of Olympus Asset Management Co. in March of last year.

And Mellon signaled just how serious banks are by purchasing mutual fund giant Dreyfus Corp.

So what's driving the interest? One factor is the oft-repeated line that asset management fees complement banks' core lending and deposit activities.

Another ingredient: Having launched mutual funds, many banks are finding it hard to get big enough to be profitable.

Yet another reason is that money managers typically have fatter profit margins than banks, said Oscar J. Junquera, managing director at Paine Webber Inc. He also heads the company's financial institutions investment banking group.

Additionally, money managers can boost banks' return on equity, which has lagged as profits and capital have grown.

And while banks face heated competition in bidding for money managers, financial institutions have some advantages, too.

For instance, most banks are publicly traded, unlike most insurance companies and money managers.

This gives banks an edge, since stock is often the preferred acquisition currency for tax reasons, Mr. Junquera said.

Non-bankers agreed that bankers are getting more aggressive.

"They're hot on our tails, these banks' " said Jon Fossel, chief executive of mutual fund giant Oppenheimer Management Corp., New York. He said Oppenheimer has bumped up against many banks in competitive bidding for fund managers, while encountering "surprisingly few" of its peers.

Meanwhile, Keycorp is pleased that it didn't have to compete for Spears, Benzak. That's because the money manager wasn't looking to sell and so didn't arrange for competitive bidding, said chairman William G. Spears.

Instead, after senior Spears, Benzak officials met Mr. Wert through a college friend of partner Louis Benzak, they liked what they saw.

Keycorp paid $50 million to $65 million for the money management firm, which oversees $3 billion of assets.

This price is near the 2% of assets that has been a benchmark for recent deals, according to Cerulli Associates.

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