DENVER - The acquisition of Dreyfus Corp. by Mellon Bank Corp. is not expected to noticeably alter either company's municipal bond activities.

"I don't see any change at all. We are what we are. We're a $30 billion muni operation," said Richard J. Moynihan, municipal portfolio manager and trader who oversees Dreyfus' municipal activities.

When asked if Dreyfus would gain any new business relationships as a result of the merger, Moynihon replied, "We couldn't possibly take on any more relationships than we have now. We do business with 250 channels in the country."

Mellon officials stipulated that Dreyfus will operate independently, but bank spokesman Tom Butch said, "There are many natural linkages and opportunities that may occur over time and we will take advantage of them. However, it is far too early to identify what they might be."

"It's a great buy for Mellon," said John Lawlor, manager of Merrill Lynch & Co.'s institutional sales and marketing group.

Mellon wants "to be in an area we've been in successfully for a long time," said Andrew McCullagh, a Denver portfolio manager who directs $1.6 billion of 11 state-specific bond funds in Colorado and other Western states for Voyageur Asset Management.

The Mellon merger is "just the tip of the iceberg," McCullagh said. "The banking community wants to get into the mutual fund industry. They feel they've missed the boat," he said, adding that Voyageur has been approached by banks, which he declined to name.

McCullagh observed that in most mergers, the acquiring company promises to leave management and operations in place, only to renege on the promise soon after the deal.

"You know how management is, and bank management in particular. The question is whether they try to consolidate the portfolio management side as well as operations," McCullagh said.

Mellon might also be later tempted to transfer its own "star" managers to Dreyfus' bigger pool of funds, he said, noting that with Dreyfus' solid track record, such an event isn't likely.

Dreyfus has $72.2 billion of mutual funds under management and Mellon $4.6 billion, according to Lipper Analytical Services Inc.

Dreyfus is known primarily as a no-load fund group that is strong in the area of national and state-specific municipal bond funds. According to Lipper, Dreyfus offers 49 municipal funds.

Many are ranked high in performance, although two large funds, the $1.9 billion California Tax-Exempt Bond and the $2.1 billion New York Tax-Exempt Bond funds, rank 42nd and 29th respectively in their peer groups.

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