First Union Corp. of Charlotte, N.C. has formed a partnership with Stephen Dalton, current manager of the Evergreen Select Secular Growth Fund, to form ForeFront Capital Advisors, a minority-owned institutional money management firm that will be based in Philadelphia.

First Union's Capital Management Group, the financial services unit that provides asset management, insurance and brokerage services, will invest $1 million and will become a 40 percent owner of the new firm which is scheduled to begin doing business in November.

The remaining 60 percent ownership will be held by Dalton who is African-American, and other employees. Two Evergreen investment staff members are expected to join Dalton in the new firm. Two of First Union's executives will hold seats on the firm's board.

The firm will be among the few minority-owned investment management firms and will cater to institutional clients, including state and municipal governments as well as corporations, according to First Union.

First Union is expecting to also ask shareholders of its $918 million Evergreen Select Secular Growth Fund, an institutional mutual fund which was converted in July 1999 from a First Union common trust fund, to approve installing ForeFront as the fund's new sub-adviser.

Dalton joined First Union from CoreStates Investment Advisors which was acquired by First Union in 1998. Dalton had been managing director and head of equity services and the lead senior portfolio manager at CoreStates.

While most fledgling start-up investment management firms take time to become profitable, the $1 million infusion of capital from First Union means ForeFront Capital should be profitable soon after beginning operations, Dalton said.

The arrangement enables First Union to tap into a new audience of ethnically diverse institutional investors, said a source close to the deal.

First Union has $258 billion in assets, and manages $80 billion among its 80 proprietary mutual funds, the Evergreen Funds.

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