Industry

Liberty Funds Group of Boston announced that it is merging the equity trading functions of its mutual fund groups - Stein Roe Mutual Funds of Chicago and Colonial Management Associates of Boston - so that trades for both fund families will be done from one central location.

Orbitex Management of New York, investment adviser to the Orbitex Group of Funds, has announced the merger of the American Diversified Global Value Fund into the Orbitex Growth Fund.

Bad news for the mutual fund industry about the slowdown and concentration of net sales has just been compounded. Data shows that the market value of fund companies has declined 14 percent since 1997, while the market value of institutional asset management companies has risen 32 percent.

Legg Mason of Baltimore, Md., announced that it has acquired Berkshire Asset Management of Wilkes-Barre, Penn., a firm that manages assets for high-net-worth individuals and institutions.

Metropolitan Life Insurance Co. of New York said it would keep its mutual fund and annuity businesses separate from those of General American Life Insurance Co. of St. Louis, Mo. MetLife announced on Aug. 27 it would acquire General American, which had been unable to repay short-term funding agreements.

Pioneer Investment Management of Boston has purchased the tiny $8.8 million Third Avenue High Yield Fund from EQSF Advisers, the New York-based adviser to the five fund Third Avenue Trust fund complex, for an undisclosed amount. As part of the arrangement, Margaret Patel, the fund's current portfolio manager, will continue to manage the fund. Pending approval of Third Avenue High Yield fund shareholders, the fund will become the Pioneer High Yield Fund.

The multiples for mutual fund companies are about eight percent less than the multiples for money management firms that run institutional assets, according to data released last week by Putnam, Lovell, de Guardiola & Thornton, the investment banking firm based in San Francisco. Data for year-to-date mergers and acquisitions of institutional and retail money management firms shows that institutional firms are being valued at 9.3 times annual pre-tax earnings and mutual fund companies are being valued at 8.6 times annual pre-tax earnings, the firm said.

At a time when merger activity in the mutual fund industry has slowed, Western-Southern Enterprise, an insurance and financial services company in Cincinnati, Ohio, is increasing its mutual fund presence through acquisitions.

The Strong Funds is acquiring a small Midwest discount broker/dealer and plans, at the same time, to create its own online brokerage. Strong Capital Management of Menomonee Falls, Wis., announced Aug. 12 that it is acquiring discount broker Ziegler Thrift Trading (ZTT).

Standard & Poor's of New York has acquired a four-year-old mutual fund information and analysis provider in Japan, for an undisclosed amount. S&P said in a statement that the company, IFIS Inc. of Tokyo, is a leading provider of mutual fund analysis that includes "depth" and "local market knowledge."