Magazine article American Banker

Fleet Annuity to Add New Unit's Funds

Magazine article American Banker

Fleet Annuity to Add New Unit's Funds

Article excerpt

Capitalizing on its recent acquisition of Columbia Management Co., Fleet Financial Group Inc. will infuse its variable annuity this quarter with mutual funds managed by the Portland, Ore., company.

Columbia's real estate investment trust and high-yield bond mutual funds will join two added Galaxy equity funds in the augmented Galaxy Variable Annuity 3, which should be available in February or March.

Before acquiring Columbia last month in a $600 million deal, Boston- based Fleet only offered four of its proprietary Galaxy mutual funds in variable annuities: money market, high-quality bond, blended equity, and asset allocation. Columbia brought $20 billion of mutual fund assets to Fleet.

Fleet is looking to another acquisition-its pending $1.6 billion deal for brokerage Quick & Reilly Group-to help sell the annuity. About 210 of Quick & Reilly's 500 brokers will offer the annuity nationwide, Fleet executives said. Fleet's purchase of Quick & Reilly is expected to close this month.

Initially, Fleet will market the expanded annuity through its 275 investment associates in bank branches and through its private-client group. Fleet manages more than $95 billion of assets.

"This is the first product, in terms of the investment management side, where we're leveraging all of the synergies of Columbia, Quick & Reilly, and Galaxy," said Robert L. Ash, managing director of Fleet Investment Management.

Besides the Columbia funds, Fleet plans to add undisclosed nonproprietary mutual funds to the annuity. Mr. Ash added that the variable annuity was a "natural" vehicle for introducing Columbia Funds to Fleet clients because it was easier to place the portfolios in a product already undergoing a makeover.

Fleet, which began selling proprietary variable annuities underwritten by American Skandia Life Assurance Corp. in 1992, had $135. …

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