Munder Capital Management On the Block

Detroit-based Comercia is expected to sell its mutual fund division, Munder Capital Management.

Munder, which has headquarters in Birmingham, Mich., has $41.5 billion in assets under management, including several pension funds.

The company, which was founded in 1985 by Loomis Sayles veteran Lee Munder, became famous during the tech boom of the late 1990s, when its Internet-focused NetNet fund saw double and even triple returns, according to the Detroit Free Press.

When the dot-com craze cooled, so did the fund, and the firm's celebrity-like status. Since 2000, staffing levels have fallen from 270 to 187.

Comerica bought a 44% stake in the company in 1994, and then bought more. Today, Comercia maintains a 95% stake in the company. Lee Munder sold his stake completely in 2000.

The Free Press reports that Comercia approached Morgan Stanley earlier this year to help sell Munder. Comercia representatives refused to comment on the potential sale.

Names among the possible suitors are American Century Investments in Kansas City, Mo., and Crestview Partners, a private equity fund in New York.

"Spinning off subsidiaries, in order to recognize greater value, seems to have become popular of late," wrote Ross Demmerle, an analyst with Hillard Lyons in Louisville, Ky., in an April report on Munder's value.  He cited the recent example of Merrill Lynch.

Demmerle said Munder might command $410 million on the auction block, while others have pegged the price as high as $1 billion.

The staff of Money Management Executive ("MME") has prepared these capsule summaries based on reports published by the news sources to which they are attributed. Those news sources are not associated with MME, and have not prepared, sponsored, endorsed, or approved these summaries.