Magazine article American Banker

Plan to Sell Robertson Funds Perplexes Some, but B of A Has Reasons

Magazine article American Banker

Plan to Sell Robertson Funds Perplexes Some, but B of A Has Reasons

Article excerpt

Bank mutual fund executives are usually thrilled when a corporate merger brings with it a new batch of fund assets. After all, when it comes to scale, banks still have some catching up to do with their mainstream mutual fund rivals.

So when BankAmerica Corp. decided to put recently acquired Robertson Stephens Investment Management on the market in preparation for its merger with NationsBank Corp., a natural question was, "Why?"

Robertson Stephens manages $4 billion of assets, including $2.4 billion in mutual funds, all investing in stocks-the very category most banks are eager to build. And the family of 12 funds includes several with above- average track records.

"I would think a bank would be thrilled to take on the mutual fund assets," said an investment banker who specializes in asset management deals.

But several factors made the match less appealing than it might appear on the surface, said people close to the decision.

An overriding concern was that Robertson Stephens' investment team would bolt, instantly diminishing the firm's value. And though the funds looked to be an excellent fit for BankAmerica on its own, that assessment changed once NationsBank entered the picture.

When BankAmerica bought the investment firm's parent, Robertson Stephens & Co., last October, its aim was to expand in investment banking. Even so, the asset management unit was to play a prominent role at BankAmerica: Its president, G. Randy Hecht, was named head of BankAmerica's asset management business.

But by the time NationsBank and BankAmerica agreed to merge in April, things looked different. NationsBank owned Robertson Stephens' arch-rival, Montgomery Securities. Robertson Stephens' investment bankers, seeing NationsBank as the driving force in the merger, pushed for a new owner. Last month BankBoston Corp. …

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