Nearly two years after buying Founders Asset Management, Mellon Bank Corp. is preparing to stamp the successful Dreyfus Corp. name on Founders' 10 mutual funds.
But the Founders name will not disappear. Rather, the funds will be renamed the Dreyfus Founders Funds, the company announced this week.
Also, the no-load fee structure on Founders' eight equity growth funds will be replaced with a multiclass structure. That will let Founders capitalize on the multiple third-party channels used by Dreyfus to sell its funds, said Lorrie Grove, a Founders spokeswoman. A bond fund and a money market portfolio will retain their no-load structure, she said.
The changes are set for Dec. 31. Founders, based in Denver, manages $7 billion of assets. New York-based Dreyfus manages $120 billion.
Burton Greenwald, a mutual fund consultant in Philadelphia, said the addition of the Dreyfus name was "inevitable."
Founders already draws on its connections, he said. The funds are currently known as "Founders Funds, Growth Specialists from Dreyfus." Pittsburgh-based Mellon bought Founders in April 1998.
Dreyfus "has an extraordinary brand name," Mr. Greenwald said. "The lion is probably the single strongest symbol in the industry."
Mr. Greenwald said that adding the Dreyfus name would enable Founders to connect its offerings to a new advertising campaign being planned by Dreyfus.
Patrice Kozlowski, a Dreyfus spokeswoman, said that she could not comment on plans for a future ad campaign. However, she said to "stay tuned."
Ms. Grove, the Founders spokeswoman, said the moves to change the name and drop the no-load structure from the funds were Founders' decision. Founders Asset Management will keep its name and its Denver headquarters.
The movement toward a multiple share class structure, which allows broker-dealers to charge fees for advice on third-party funds, reflects the desire among investors for advice, Ms. Grove said. Existing shareholders will have their shares designated as F class, or Founders class, she said. All outstanding shares will be grandfathered.