Instead of buying investment management firms, Amsouth Bancorp is partnering with them.
The Birmingham, Ala.-based $18.6 billion-asset banking company has seeded three new investment firms in the past year, including, last Wednesday, OakBrook Investments, a start-up in Lisle, Ill.
Amsouth, which manages $10 billion of assets on behalf of trust and brokerage customers, helped to open the doors of Sawgrass Asset Management of Jacksonville, Fla., last month and Rockhaven Asset Management, Pittsburgh, last year.
The bank's plan is to expand its $3.6 billion proprietary mutual fund family with additional investment styles. For instance, Rockhaven, led by former Federated Investors portfolio manager Christopher Wiles, subadvises the Amsouth Equity Income fund.
Sawgrass, run by three former NationsBank Corp. managers, launched an Amsouth fund on Monday that invests in small-cap growth stocks. It also plans to subadvise an Amsouth broad market fixed-income fund later this year.
And OakBrook, run by three former Northern Trust Corp. executives, is expected to manage mutual funds and separate accounts for Amsouth clients.
"We felt that this particular strategy suited our purposes very well, as opposed to going out and buying an existing registered investment adviser," said Michael C. Baker, senior executive vice president in charge of Amsouth Capital Management.
Under the Amsouth arrangement, the bank and the start-ups split ownership evenly for the first two years. Over time, the bank will decrease its stake.
OakBrook's principals-Neil Wright, Janna Sampson, and Peter Jankovskis- joined Northern Trust late last year through that bank's acquisition of ANB Investment Management & Trust Co. from First Chicago NBD Corp.
Rather than work for a bank, OakBrook's principals prefer to be affiliated with one, said Mr. Jankovskis, director of research.
"We are going to be able to act like professionals, control how to move the firm going forward, and invest any way we choose," he said. At Northern, OakBrook's founders feared they would have to tweak their strategy, Mr. Jankovskis said. To keep their style intact, they were willing to start from scratch with a new firm.
Stephen N. Potter, a Northern senior vice president, disagreed. "We never told them anything except we like their product."