Magazine article American Banker

1st Interstate Unites Fund Families and Their Management

Magazine article American Banker

1st Interstate Unites Fund Families and Their Management

Article excerpt

First Interstate Bancorp has expanded its mutual funds and consolidated its investment management operations under one unit.

The Los Angeles-based banking company on Oct. 2 combined most of the portfolios from its two mutual fund families - the Westcore Funds and the Pacifica Funds - under the Pacifica name.

At the same time, the funds' management was moved to the First Interstate Capital Management unit, in Scottsdale, Ariz.

The reshuffling has been ongoing since late last year, and started with the defection of several portfolio managers associated with San Diego Bank and Trust Co., which First Interstate acquired, along with the Pacifica Funds, in 1993.

First Interstate, a $55.8 billion-asset company is also embroiled in a hostile takeover bid by Wells Fargo & Co., though bank officials and most observers say the developments are not related.

Plans to consolidate the funds under one name and management started well over a year ago, bank officials said.

The strain of maintaining a splintered marketing effort and separate management teams was expensive and unwieldy in light of the cost-cutting drive the bank was undergoing, said Edward Claunch, president of First Interstate Capital Management.

"There had been support for this consolidation from within the unit, but really it was senior management's interest in this that accelerated the decision," he said.

But sources close to the bank said First Interstate's decision to move all of its mutual fund operations to Arizona caused an uproar among many long-time portfolio managers, who decided to leave rather than relocate.

Many of the former managers joined Kennebec Investment Advisors, San Diego. The company was set up last year by Harley K. Sefton, who was the principal investment adviser for San Diego Bank and Trust and had helped manage the Pacifica Funds. …

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