More than a year after the deal that created it, Wells Fargo & Co. has merged the mutual fund assets of the former Norwest Corp. with those of the old Wells Fargo.
Thirty-five Wells Fargo Stagecoach mutual funds were combined with 39 Norwest Advantage funds in a new family, the Wells Fargo Funds, that numbers 61 portfolios. Norwest bought Wells Fargo in November 1998 and kept the Wells name.
With $56 billion of assets, the Wells Fargo mutual fund group ranks sixth among bank-managed fund families and 26th among all mutual fund companies.
The consolidation took considerable time, acknowledged executives at the San Francisco banking company. But they added that the deliberate pace was set by president and CEO Richard Kovacevich, who has told the financial community that he would take an exacting approach to integrating the two banking companies.
"We want to be among the foremost fund families out there," said Michael Hogan, executive vice president of the mutual fund group. "We want people to look at us and say, 'How are they doing that?' "
To build awareness, the company has placed notices about the funds' consolidation in The Wall Street Journal and has begun advertising in regional dailies, said Barbara Page, director of consumer and institutional markets for the fund group.
Besides selling the funds through its bank branches, Wells Fargo has agreements with brokerage firms, as well as with HSBC Holdings PLC. And Mr. Hogan said he would like to make more distribution deals with banking companies.
Wells Fargo has a better shot at garnering assets through its in-house brokerage and institutional sales programs, said David B. Master, managing director at Optima Group in Fairfield, Conn. "You're generally able to leverage a house brand more effectively when you have a degree of control over the distribution channel."
The company's private-client services group plans to add brokers and sell more investment products, which could benefit the mutual fund group, Mr. Master said.
Wells is likely to proceed cautiously with growth plans for the fund family, said Katrina Blecher, a banking analyst at Brown Brothers Harriman & Co. of New York. "I don't see them throwing a lot of resources at this without having a clear-cut strategy to reach their hurdle rates," she said.
There have also been some administrative changes for the funds. Though both predecessor banking companies had handled record keeping internally, that service is now being provided by Boston Financial Data Services.
And fund accounting is being handled by Forum Financial, which had done this for Norwest's funds, though Wells handled the task internally.
A spokeswoman said the changes caused shifts in responsibility for some Wells employees but no job losses.