There is still room for consolidation in the mutual fund industry, according to Christopher M. "Kip" Condron, president and chief executive officer of the Dreyfus Corp.

Though acquisitions have slowed in recent months as the equity market has declined, Mr. Condron said he is still approached from time to time by "small asset managers" looking for a buyer. "I still see some things," he said.

Mr. Condron spoke with American Banker before the $101 billion fund company's annual market outlook briefing for reporters in New York this week.

Mellon Bank Corp., Dreyfus' parent, has been an aggressive acquirer in the mutual fund business in recent years. Asked whether the banking company has anything up its sleeve, Mr. Condron said, "We're always looking."

He speculated that companies such as Putnam Investments and Fidelity Investments in Boston and Merrill Lynch & Co. in New York could all be potential acquirers.

However, he offered a caveat. Some recent mergers in the industry appear to have been done for the sake of making an acquisition and lack a cohesive strategy, Mr. Condron said. "I think there's a real risk of failure in some of these mergers."

To pull off a successful acquisition of a mutual fund company, the buyer must maintain the autonomy and entrepreneurial spirit of the acquired institution, Mr. Condron said. "If you respect and foster that culture, you can make it work," he said.

Mellon has had firsthand experience with the risks of acquisitions. After it closed its $275 million deal for Founders Asset Management in April, two senior professionals left the Denver fund company. They were Jonathan F. Zeschin, Founders' chief executive officer, and Edward F. Keely, manager of Founders Growth Fund.

The company said the decisions were not related to the acquisition. Mellon is still looking for a successor to Mr. Zeschin.

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