The merger announced earlier this month between First Union Corporation of Charlotte, N.C. and Wachovia Corporation of Winston-Salem, N.C. brings together two families of mutual funds that will have $96 billion in combined assets, according to the companies.

First Union manages the Evergreen Funds, the larger of the two families, with 46 equity funds, eight fixed income funds and six money-market funds, and a total of about $83 billion in assets under management as of March 31, according to Financial Research Corp. of Boston. The Wachovia Funds are made up of 11 equity funds, seven fixed income, and three money-market funds and had about $9 billion in assets as of March 31, according to Financial Research Corp.

The combined fund family will be the 17th largest mutual fund complex, according to Financial Research Corp. It will be the fourth largest bank-owned mutual fund complex, according to the companies.

The companies will place greater emphasis in the future on asset and wealth management, including mutual funds and annuities, the companies announced. The companies complement each other well in this regard because of First Union's broad product line and Wachovia's private banking and distribution capabilities, said G. Kennedy Thomson, chairman, president and CEO of First Union, who will become president and CEO of the new company. The new company will take the Wachovia name. The combined companies should enable the asset and wealth management businesses to grow at a 15 percent rate or higher, Thomson said.

"This deal improves our ability to accelerate growth in the capital management, wealth management product line," said Thomson. "We bring more customers to the table. It increases our opportunity to cross- sell the product lines that we have both built. We've got more capital being generated and we will use that capital to invest in asset management and wealth management businesses. In fact, we believe that the superior distribution that this company will have will be a magnet to other asset management companies that are looking for distribution in this environment."

While the companies plan to focus on asset management as a means of growth after the merger, it is not clear how the companies' mutual fund operations will change as a result of the merger. When complexes merge, there is often an overlap of funds, which results in the merging or liquidating of certain funds.

"It would be premature to say how we're going to handle the funds," said Ginny Mackin, a spokesperson for First Union. "Decisions on that will be made over the course of the next two or three weeks."

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