When NationsBank's new joint venture with a British money management firm begins operating in July, other U.S. bankers will be watching.

The alliance between Charlotte, N.C.-based NationsBank Corp. and London-based Gartmore Capital Management is being billed as a model for joint ventures involving U.S. banks seeking international asset management expertise.

"Getting meetings set up with other banks to talk about this has not been hard to do," said Bradford I. Hearsh, one of two managing directors at PaineWebber Inc. who put the deal together for NationsBank.

"There is enormous interest in the nature of this transaction," he said.

The joint venture - to be called Nations Gartmore Investment Management - will manage individual accounts and a line of mutual funds primarily for investors in the United States interested in diversifying their holdings.

Though the venture isn't scheduled to begin operating until July 1, expectations for its success are high.

"For NationsBank, it's a very, very good deal," said Christopher G. Poll, chairman of Micropal, a London-based mutual fund tracking company. "It is going to be a feature of the American investment system to be linking up with more and more international managers."

As part of the deal, NationsBank and Gartmore are each half owners of Nations Gartmore. The new company, with about 25 employees, recently got approval from the Securities and Exchange Commission and is awaiting regulatory approval from the British equivalent of the SEC.

NationsBank, which already manages more than $57 billion of assets, will market the services from its headquarters in Charlotte to high-net-worth individuals, to retail customers through its branches, and to domestic institutional clients.

From its offices in London, Gartmore will use its international expertise to manage investment products that will include an existing international equity fund, two new international funds, and a new global fund, said Charles G. Smith 4th, chief executive officer of Nations Gartmore. An international fund must invest abroad, whereas a global fund can have some holdings in the domestic market.

Micropal's Mr. Poll, whose company tracks more than 31,000 mutual funds from all over the world, called NationsBank a "visionary" for conceiving the joint venture. Although only 8% of U.S. pension funds invest abroad, forecasts call for that proportion to more than double in the next decade, he said.

Several analysts' reports mention the "growth record and excellent fund management performance" of Gartmore, England's fourth-largest pension fund manager and its 16th-largest fund manager.

Gartmore tripled its assets under management from 1990 to 1994 and now has about $30 billion of mutual funds under management.

But Gartmore's good name is apparently not the only reason NationsBank's deal is being hailed.

In addition to owning half the new company, NationsBank has an option to buy up to 10% of Gartmore at current market prices, conditional on the joint venture's raising about $5 billion of assets in the next five years.

And the U.S. bank has an option to buy an additional 15% of Gartmore, also at today's market price, if Banque Indosuez were ever to sell some of its 75% stake.

"This is where I think much of the hidden value in this deal may exist," said PaineWebber's Mr. Hearsh. "If the joint venture is successful and Gartmore continues to be successful, the ability to buy stock in the company at today's market price ought to be a very attractive option."

And even if the deal falls through, NationsBank hasn't invested any capital, so there is not as much at stake.

"It's consistent with NationsBank's strategy, which is to expand as quickly as possible without any downside risk," said Moshe Orenbuch, a research analyst at Sanford C. Bernstein & Co.

But the success of Nations Gartmore may depend on how convincing an argument NationsBank makes to its customers to invest abroad.

Mr. Poll observed: "The great problem for banks is communicating that message of international investment to mom and pop in Iowa, particularly at a time when only 10% of the American population have passports."

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