Observers of Zurich-Kemper Investments Inc., Chicago, are speculating the mutual fund company is eyeing money management firms overseas, especially in the United Kingdom.

Zurich-Kemper, whose parent company is Swiss, lacks international portfolios, but there aren't many in the United States or continental Europe on the block right now. The company has been on an acquisition drive, most recently having bought Dreman Value Management, a Jersey City stock fund company.

"The next foothold is over here (in the United Kingdom), because there isn't much else around the world," said Christopher Poll, chairman of London-based Micropal Group Ltd., which tracks mutual fund performance.

Mr. Poll's remarks are in reaction to a recent public statement by Zurich-Kemper's president and chief executive officer, Stephen Timbers, that he is actively negotiating to buy a money management firm. A company spokesman confirmed that Zurich-Kemper is "looking at a couple of them (money management companies.)"

The spokesman said he did not know if the company was looking overseas, though. He did say Mr. Timbers wants to "fill in product gaps or gain strong four- or five-star funds."

Mr. Poll said likely takeover targets include companies such as Oxon, England-based Perpetual PLC, London-based M&G Group PLC, and London-based Henderson Administration Group.

Like the United States, the United Kingdom has seen a wave of consolidations of mutual fund companies. "Almost anybody over there is for sale," said Geoffrey Bobroff, a mutual fund consultant in East Greenwhich, R.I.

Mr. Bobroff agrees that Zurich-Kemper is in dire need of international portfolios to round out its roster of mutual fund offerings. So far, 32.6% of its $32.5 billion of assets under management are in fixed-income funds and 41.8% are in stock funds. The rest are made up of international funds, tax-free portfolios, and closed-end funds.

But one investment banker insisted there's no meat to Mr. Timbers' remarks. "Steve Timbers looks at everything," the banker said. Another investment banker said Mr. Timbers is looking at small domestic stock funds.

U.S. companies that seek international expertise are beginning to look to foreign-based companies to start up mutual funds for them. The most recent example is Berger Associates, Denver, which formed a joint venture with Bank of Ireland Group and launched an international fund last year.

Berger is taking advantage of a recent ruling by the Securities and Exchange Commission that allows fund companies to advertise the track records of a money manager that they take in-house, even if a portfolio they are also advertising is brand new.

Zurich-Kemper might try such a strategy, which "has not gone unnoticed in the fund industry," said Don Phillips, president of Morningstar Inc.

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