Four months after it acquired First of America Bank Corp., National City Corp. is in no rush to combine mutual fund families.

First of America's Parkstone Funds will continue to operate alongside National City's Armada Funds for the next 18 months and possibly longer, said Kathleen Barr, managing director of fund sales and marketing at Cleveland-based National City.

Melding the operations would create a $15.4 billion fund family-$6.9 billion in 18 Parkstone portfolios, $8.5 billion in 20 Armada Funds.

But the banks have decided to let initiatives that are under way in both fund families run their course before considering whether to merge them, Ms. Barr said.

For instance, before its merger with First of America, based in Kalamazoo, Mich., National City was converting assets from common and collective trust funds into the Armada Funds. The work began in the spring and is to be wrapped up in November.

Though there is a "large overlap" in investment strategies, Ms. Barr said, the funds could be melded after study.

"They are two good names. The FOA (First of America) market knew the Parkstone name," Ms. Barr said. National City would rather bear the costs of running two fund families than run the risk of diluting their value, she said.

"You want to make the best decision for the fund family and shareholders. It was a good economic decision to give us the time to do that," Ms. Barr said.

However, the banks' asset management divisions, National City asset management group and First of America Investment Corp., will soon come together under the name National City Investment Management Co.

Many Parkstone managers have relocated from Kalamazoo to Cleveland, bringing the number of investments professionals to 30. "A little over half" originally worked for National City, Ms. Barr said.

And this fall the two fund families are consolidating some key back- office functions with SEI Corp., Oaks, Pa.

The Parkstone Funds, currently distributed by Bisys Group, will shift to SEI in September. The administration contract will remain with Bisys until at least Dec. 31, 1999.

The Armada Funds, already a distribution client of SEI, moved the administration contract there May 1 from PNC Bank Corp.'s PFPC unit.

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