SAN FRANCISCO - A partial spinoff of Robertson Stephens Inc., the San Francisco-based investment bank owned by FleetBoston Financial Corp., could pull in as much as $2 billion in cash for Fleet and act as an important magnet for investment banking talent.

Fleet chairman Terrence Murray confirmed last week at an investor conference in New York that the company had been considering a partial spinoff of the wholly owned investment banking unit. The comment, which was made in response to a question, came after weeks of speculation about such a move.

For Fleet, such an offering would have two main advantages. First, the proceeds could be used as capital in the future. Second, with a market value attached to Robertson Stephens, Fleet would have an easier time convincing investors that its stock should reflect the value of its booming capital markets business.

"It's always nice to have an extra bundle of cash," said Andy Collins, an analyst at ING Barings.

In addition, Fleet would have a more powerful array of employee incentives, analysts said. Fleet is such a diversified company that the earnings of Robertson Stephens have modest impact on overall earnings. Creating a Robertson Stephens stock would give employees of the unit "a purer play" on its performance, said Thomas Theurkauf, an analyst at Keefe, Bruyette & Woods.

Indeed, reasons for Robertson Stephens to have its own stock are manifold, with compensation topping the list. Investment banks that are owned by a larger parent whose main line of business is much different than its own have found other ways to reward highly sought-after workers - particularly with opportunities to invest in bank-managed private equity funds.

But often those nonstock incentives are not enough.

"Some of the more successful business models give employees of the brokerage a separate stock as a reward," said Lori Appelbaum, an analyst at Goldman Sachs & Co.

PNC Financial Services Group in Pittsburgh launched an initial public offering for its investment management unit, BlackRock, last October and sold nine million shares. PNC retained 70% of the company.

In PNC's annual report for last year, former chairman Thomas O'Brien said the partial spinoff, by creating a currency to attract and retain key employees, would help BlackRock expand.

BlackRock did just that, attracting a team of equity portfolio managers in Europe last year.

Sources familiar with the situation said that Robertson Stephens has been discussing an initial public offering with Fleet executives for months, and that such discussions are "nowhere near finalized." A potential IPO was first reported Sept. 6 by the San Francisco Chronicle, which cited unnamed sources.

But one analyst, citing Fleet's dealmaking history, said the Boston-based banking company may be looking for a spinoff soon rather than later, because of the increasingly wide spread between the valuations of investment banks and brokerages and the valuations of commercial banks.

"I view Fleet as a good dealmaker - they buy right and they sell right," said Mr. Collins. "They may be thinking that if valuation differentials are getting excessive between banks and brokerages, it's a good time to get a public valuation of the company."

Brokerage stocks have been trading at all-time highs this year. The biggest of the Wall Street firms have been trading at 16 to 18 times their 2000 earnings. Fleet shares, in contrast, were trading at about 12 times trailing earnings, about average for commercial banks.

That could change for Fleet in the event of a Robertson Stephens IPO, regardless of its size, because the value of the investment banking business would be easier for investors to identify. The unit, whose business is focused on advising and underwriting equity offerings for young, high-growth companies, is expected to produce net income of about $275 million this year, year-to-date capital markets activity and its half-year earnings suggest, said Mr. Collins.

If a Robertson Stephens offering is valued at about 13 to 14 times earnings, roughly in line with or just above investment houses like Lehman Brothers - Robertson Stephens' specialization in the high-growth equities business could command a premium - that puts a market capitalization for an IPO at between $3.5 billion to $4 billion.

Such a valuation for Robertson Stephens would reflect the price of another investment bank that was recently acquired by a commercial bank. In December, Chase Manhattan Corp. bought the emerging growth specialist Hambrecht & Quist Group of San Francisco for a little over 12 times 1999 earnings.

Fleet's Mr. Murray did not indicate when an offering might be made or how many shares would be offered to the public.

Liz Moyer contributed to this report.

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