Chase Manhattan Bank's Global Investor Services is betting that a new service it is developing with a London financial services technology firm will help meet growing demand for fund choice among European investors.

Chase of New York and Investia, Ltd. of London have formed a joint venture, FundsHub of London, the companies announced last week. Chase has invested $20 million for a 35 percent stake in FundsHub, Chase and Investia officials said in interviews. Investia will hold a 55 percent stake in the joint venture, with the management and staff of FundsHub owning 10 percent, said Ron Lay, chief technology officer for Investia.

FundsHub will offer services to European and United Kingdom fund distribution firms - including banks, insurers and retail brokers - that will enable the distributors to use the Internet to sell a range of proprietary and non-proprietary funds, Chase and Investia executives said.

Historically, distribution of funds in Europe has been primarily through banks, which have sold only their own funds, said Mary Kay Orr, senior vice president for Chase. European investors now are demanding more choice from banks, Orr said. FundsHub's service is designed to meet that need, she said.

FundsHub expects to offer funds from roughly 20 fund companies, Lay said. Distributors who use the service will be able to retrofit the service to include funds of their own choosing, Chase executives said.

FundsHub expects to introduce the service in the U.K. in September and in Germany next year, Lay said.

FundsHub will make distribution easier but some structural difficulties that have vexed fund companies trying to sell in Europe will remain, said Richard Warne, a regional business executive for Chase. Funds still will have to be registered in every country in which they are sold, he said.

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