Plans to merge HSBC Funds with HSBC Investor Funds, formerly known as Republic Funds, have been permanently nixed, said a spokesperson for the two entities' parent company HSBC Bank, New York.
The two fund families' boards of trustees could not iron out an agreement, or compromise on key issues, the spokesperson said. She declined to comment on what the divisive issues were.
Typically, funds of merging banks find a way to compromise and combine, the spokesperson said. A spokesperson for HSBC Funds said the group would not comment except to say that the funds will change names.
Pending shareholder approval, Wilmington Trust Company, Wilmington, Del., will be the new adviser for HSBC Funds, effective Sept. 28, when HSBC Asset relinquishes its advisory role. HSBC Funds will take on the Wilmington name, said a spokesperson for HSBC Funds.
As a result of ditching the merger, HSBC Asset Management, New York, resigned as HSBC Funds' investment advisor.
The previously named Republic Funds, however, will stay within HSBC Bank's umbrella. HSBC Bank had a choice of which group of funds to keep.
The spokesperson said that after attempts to merge the entities failed, the decision on which side to keep was based on size, since both families of funds offered similar products.
HSBC Investor Funds oversees $5.4 billion in assets while HSBC Funds claimed roughly $340 million in assets.
HSBC Bank acquired Republic National Bank of New York in 1999 and hoped to combine the two operations' family of funds to generate more business through synergy and cost cuts.