There is no doubt that a rise in regulation has increased costs for mutual funds in the past few years -- to the point of pain for many small, independent fund companies. But are things bad enough to prompt these companies to give away their assets just to get out of the business?

Reserve Funds thinks so. The money-market fund giant, headquartered in New York, hopes to build up its stable of seven equity mutual funds, recently renamed the Hallmark Funds, by absorbing the assets of small, money-losing fund shops that have had enough.

Subscribe Now

Access to premium content including in-depth coverage of mutual funds, hedge funds, 401(K)s, 529 plans, and more.

3-Week Free Trial

Insight and analysis into the management, marketing, operations and technology of the asset management industry.