Money Management Executive Latest News

With assets finally picking up at money management firms, a wave of mergers and acquisitions, or selective buy-outs, is about to take place, Business Week reports. Following Lehman Brothers’ announcement last month that it will purchase Neuberger Berman and Charles Schwab’s acquisition of State Street’s private client business, Citigroup is now in the market and Janus might be a likely target.

Charles Schwab has launched a mutual fund and a managed account platform that will invest in dividend-paying stocks. The Schwab Dividend Equity Fund and the Schwab Personal Portfolios Dividend Equity platform will both invest in dividend-paying stocks that have been rated either an A or B by Schwab Equity Ratings. They are designed to take advantage of the Jobs and Growth Tax Relief Reconciliation Act of 2003 that reduces the maximum tax on dividends to 15%.

Stock funds had net inflows of $600 million in the week ended Wednesday, a sharp drop from the $4.1 billion stock funds took in during the previous week, according to TrimTabs.com, Dow Jones reports. Domestic stock funds took in $1.2 billion, but international stock funds lost $600 million. The previous week, both domestic and international stock funds had net inflows, of $3.2 billion and $800 million, respectively.

A handful of mutual funds closed to new investors are still charging 12b-1 fees, Standard & Poor’s found. One hundred and thirty nine funds with a total of 232 share classes are charging an average 62 basis point 12b-1 fee. Equity funds charge the highest fee, 65 basis points. Money market funds charge an average 52 basis points in their 12b-1 fees, and fixed-income funds charge an average 48 basis points, S&P said.

The Securities and Exchange Commission has charged Nevis Capital Management, its president, David R. Wilmerding III, and executive vice president, John C. Baker, with inequitably allocating shares of initial public offerings to only two of the firm’s 105 clients. The firm only allocated IPOs to the Nevis Fund and Snowden Limited Partnership, although it falsely stated in SEC filings that it would treat all of its clients equally, the SEC said.

Two investors in the $4.8 billion Morgan Stanley American Opportunities Fund have filed a lawsuit against the fund’s advisor, Morgan Stanley Investment Advisers, and its distributor, Morgan Stanley Distributors, charging them with receiving soft-dollar compensation, the Associated Press reports. Chana and David Yampolsky do not specify the amount of soft-dollar compensation Morgan Stanley received in their suit, which they filed in U.S. District Court for the Southern District of New York. But they charge Morgan Stanley with breaching its fiduciary duty by receiving what they call unreasonably high compensation. The fund took in $27.8 million in fees in 2002.

GlobalBridge, a Minneapolis managed account provider, has hired a former U.S. Bancorp Piper Jaffray executive as president in an effort to expand distribution through community banks and small community trust companies. Ross Rogers, the former president of U.S. Bancorp Piper Jaffray's private advisory services business, is now president and principal of the firm.

While the Investment Company Institute and politicians are endorsing proposed legislation to reform the mutual fund industry, critics are crying foul, saying recent revisions have gutted the bill of its integrity.

Cash from the sidelines is pouring into technology funds these days as investor fear has abated, sparking a phase of accumulation on Wall Street.

Cerulli Associates has launched a new separately managed account product that aims to provide clients with access to key industry metrics, data and analysis. The Boston-based research firm introduced Quantitative Update in late July to complement its wide range of products and services geared toward covering the managed account industry.