Nike Securities Completes the Purchase of Clayton Brown's Unit Trust Division
CHICAGO - Nike Securities has completed the purchase of the unit investment trust division of Clayton Brown & Associates Inc., Nike officials announced yesterday.
Nike, a limited partnership formed by Bob Van Kampen in May, did not disclose terms of the transaction. Gerald Pelzer, Clayton Brown's president, said the firm received a "very fair offer" for the UIT division, which made up 30% of the company's business.
According to a press release from Nike, Clayton Brown sponsored 82 different trusts in 1991, representing an investment of more than $625 million. Since it was formed in 1974, Clayton Brown has sponsored more than $6 billion of unit trusts under the First Trust name.
Mr. Van Kampen said his firm bought "18 years of successful business" when it completed the transaction for Clayton Brown's UIT division.
"We intend to build rapidly upon the excellent reputation which the First Trust name has established over the past 18 years," he stated. "This is the first step in building a total financial services product line, and we hope to grow the distribution system as well as the range of products offered."
Mr. Van Kampen added that most of the 40 to 45 employees in Clayton Brown's UIT division have chosen to join Nike. James Bowen, the former head of Clayton Brown's UIT division who joined Nike earlier this year, will head up the new operation at Nike, according to the press release.
As for Clayton Brown & Associates, Mr. Pelzer said the firm would "continue to expand the capital markets part of our business."
He added that business includes tax-exempt and taxable institutional sales as well as public finance activities.
Mr. Van Kampen confirmed last month that his new firm was in negotiations to buy the division from his former business associate Clayton Brown, the chairman of Clayton Brown & Associates. Clayton Brown was once part of a firm - Van Kampen Wauterlek Brown & Co. - that Mr. Van Kampen started in 1967. Seven years later, the firm was divided into two separate companies - Van Kampen Merritt and Clayton Brown & Associates.
In 1984, Mr. Van Kampen sold his firm to Xerox Financial Services, which announced earlier this year that it was discontinuing its investment banking business to concentrate on the development and distribution of its asset management products, including UITs.
Less than a month after that announcement, Mr. Van Kampen started Nike with several former Van Kampen Merritt employees. Ironically, Nike has leased some of Van Kampen Merritt's old office space in Lisle, Ill. Van Kampen Merritt moved its offices to Oak Brook, Ill., earlier this year.
Mr. Van Kampen said he hoped to consolidate Nike and the newly acquired UIT business in Lisle within 30 days. Nike has been running its sales, trading, and underwriting business out of temporary quarters in West Chicago, Ill., and the UIT business out of Clayton Brown's Chicago headquarters.