CDC Nvest Funds, a wholly owned subsidiary of CDC IXIS Asset Management North America, is shuttering its subsidiary, Kobrick Funds, and will liquidate three funds and replace it as a sub-advisor to the Nvest Star Advisers Fund, CDC Nvest Funds announced yesterday.

An inability to attract assets and volatility in the growth sector - the investment style of all three Kobrick funds -- was cited by the company as the primary reasons for closing the business.

The Kobrick Capital Fund and the Kobrick Emerging Growth Fund will be merged into the CDC Nvest Star Growth Fund, a new sub-advised fund that will be launched sometime in the fourth quarter, according to a company spokesperson. The Kobrick Growth Fund will be merged into the CDC Nvest Large Cap Growth Fund.

'Given the current volatility in the market for growth stocks, attracting new assets into our funds has been challenging as the fund industry becomes increasingly competitive and capital intensive,' said Fred Kobrick, CEO of Kobrick Funds, in a statement. 'Our small size made it even more difficult for us to compete for assets. This is an appropriate time for me to focus my efforts on other aspects of the investment business.' A total of nine people who worked for Kobrick Funds will lose their jobs, a spokesperson said.

CDC Nvest acquired Kobrick Funds in July 1999 for an undisclosed amount. At the time of the sale, Kobrick Funds offered a hedge fund, which Fred Kobrick retained and ran separately from CDC Nvest Funds, the spokesperson said.

As of March 31, CDC Nvest Funds had approximately $6 billion in assets under management.

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