PNC Advisors is selling nearly 40% of the assets under management in its ultra-high-net-worth unit to a private company being formed by some of its former executives.

The asset management arm of Pittsburgh's PNC Financial Services Group Inc. has just announced it has a deal to sell $6 billion of the $15.2 billion of assets managed by Hawthorn, the unit that caters to ultra-high-net-worth clients, which it defines as those with more than $20 million of investable assets. The deal is expected to close in late March.

The new company, Veritable LP, will open its doors next month. Brian Goerke, a PNC spokesman, said Veritable will hire 50 PNC employees and will focus on investment counseling and customized reporting services.

Hawthorn will continue to focus on investment management, fiduciary and advisory services for the wealthy. Its clients will have access to Veritable's services, and vice versa, he said.

Veritable and Hawthorn will refer clients to each other under a strategic alliance agreement, although Veritable will also have non-PNC clients, Goerke said.

The sale would result in a better financial model for both parties and would have a negligible effect on PNC's earnings, he said. PNC would lower its costs by eliminating the expenses associated with compensating Veritable's three principals and 50 employees. However, PNC would also lose income generated from managing the assets sold.

PNC Advisors generated $72 million of its parent's $1 billion of net income last year and had a total of $53 billion of assets under management at yearend. Last year PNC initiated cost saving measures in PNC Advisors that are expected to result in $20 million of annual savings beginning this year.

Analysts say this kind of realignment is done to retain key accounts.

Separately, PNC said in a SEC filing Friday that it gave James Rohr, its chief executive, a $1.88 million bonus last year, more than twice his 2002 bonus. His salary increased by 3.8%, to $882,692, but restricted stock award increased more than tenfold, to $4.5 million. PNC's stock rose 25.7% last year.

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