Striving to counter the effects of a maturing market for mutual funds, some fund companies are broadening their menus to include a more flexible asset management option for wealthy investors.

Separate accounts - managed portfolios of stocks or bonds based on a specified investment style - are proving an increasingly popular alternative at some investment companies. The accounts give wealthy investors more control over the types of securities they hold, which among other things can help them mitigate tax consequences.

Some fund companies, such as Janus Capital Corp. of Denver and T. Rowe Price of Baltimore, have managed separate accounts for wealthy individuals for years. Others, such as OppenheimerFunds of New York and Massachusetts Financial Services of Boston, are just beginning to. Still others are considering the option.

Many fund companies already manage separate accounts for institutional investors such as pension funds. But the increased interest in retail separate account management is spurred partly by a belief that mutual funds, which have grown to a $6.8 trillion industry, are nearing their peak. In response, fund companies are seeking to diversify.

"Mutual funds are becoming a much more mature business," said Robert Leo, vice chairman of Massachusetts Financial's distribution arm. Yet there are about $200 billion of assets in separate accounts throughout the industry, and the amount has been doubling every year, he said.

"Frankly, it would be a poor decision not to be in that business," Mr. Leo said.

Other fund companies already offering retail separate account management include Boston's Eaton Vance Corp.; Franklin Resources Inc. of San Mateo, Calif.; Chicago-based John Nuveen & Co.; and Alliance Capital Management of New York, through Regent Investor Services, an investment management company it owns. Federated Investors of Pittsburgh is among the fund companies considering offering such accounts to retail clients.

Though some fund companies, including Janus and T. Rowe Price, pitch their services directly to retail investors, OppenheimerFunds and Massachusetts Financial are looking to brokers at the major wire houses to send business their way.

Twenty-six financial services firms - among them banking companies, wire houses, regional brokerages, insurance companies, and independent broker-dealers - pair high-net-worth investors with money managers through products called "consultant wraps," according to Cerulli Associates Inc. of Boston.

These products, which are offered by banking companies such as New York-based Chase Manhattan Corp. and Wells Fargo & Co. of San Francisco, are part of a high-net-worth client's portfolio and give the client access to an institutional money manager for a minimum investment of $100,000 to $200,000.

But it takes strong performance and hard work to be recommended by these financial services companies, said Jeff Benjamin, a consultant at Cerulli. "If you're just another bar of soap on the shelf, you're not going to get that much attention," he said.

Indeed, Mr. Leo of Massachusetts Financial said it takes six to nine months to build the necessary wholesaling staff, back-office functions, and approvals from brokerage firms. His company plans to hire wholesalers specifically to drive its retail separate account business, he said.

Massachusetts Financial said it hopes to have agreements with major wire houses by the second quarter, and Mr. Leo predicted that, within three to five years, 10% to 15% of the fund company's business could come from separate accounts.

James H. Ruff, president of OppenheimerFunds' distribution arm, said his company also hopes to be on shelves at wire houses by early next quarter and to expand that reach by the fourth quarter. "It's the next step in the progression of money management for individual investors," he said.

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