AT THE BELL

Loomis may lower minimums

Loomis Sayles & Co. will convene its trustees this week to discuss plans to lower the minimum investment requirements on its 17 mutual funds to $25,000. The proposal comes a little more than a year after the Boston-based firm, which manages about $65 billion in assets ($2.3 billion of it in mutual funds), raised the minimum to $250,000 from $2,500. The $2,500 minimum was only available to investors buying the fund through discount brokerage supermarkets. Loomis declined to comment, but company sources say top executives are unhappy with the high minimums because they make it more difficult for the firm’s funds to catch the attention of the financial press.

Jobbing out funds said to pay

When it comes to owning a mutual fund company, it may be better to rent a portfolio manager than to employ one. A survey by Financial Research Corp. of Boston has found that funds managed under a subadvisory arrangement performed better over both one-year and three-year periods than did in-house funds, even on an after-cost basis. According to the study, funds contracted out to other firms generated a 59.62% cumulative return over three years, compared to 56.55% for in-house managed funds. Such arrangements are popular among banks, brokerages and fund companies that want their name on a mutual fund but don’t want to employ a staff to run it. “I definitely think it’s a new criterion for investors to take a look at whether a fund is internally managed or not,” says Ray Liberatore, an FRC analyst.

Amex: Funds up, annuities off

Cash sales of mutual funds in the first quarter by American Express Financial Advisors were up a whopping 27% from the same time last year to a record $5.1 billion, according to earnings reports. Earnings at the investment unit of American Express Co. also were up 18% to $186 million. So why did the firm’s internal sales documents show an anemic 2.5% growth rate through March 17 in “total weighted production,” the measurement Amex uses to assess the sales production of its 8,733 financial planners? Because sales of annuities and life insurance were way down. First-quarter sales of annuities were off 25% from the year-earlier period and life insurance sales dipped 19%. Amex gives greater weight to annuities and insurance than to mutual funds because they are more profitable.

Social Security option bill near

Sen. Phil Gramm, R-Tex., plans to introduce legislation soon that would give workers covered by Social Security the option of investing 3 percentage points of the 12.4% payroll tax in individual investment accounts. The accounts would be managed by any fund that qualifies under regulations set by an investment board. Guaranteed benefits, survivor and disability benefits would be preserved under the proposal.

Neuberger without trimmings

Neuberger & Berman may be the next hot IPO, but the big Wall Street partnership doesn’t plan to cede much control. If the firm decides to take the plunge, it won’t take more than 20% of the company public, says Peter E. Sundman, a principal. The New York firm, which runs $21.1 billion in mutual funds and a total of $56 billion, has hired Goldman Sachs to explore an IPO.

More UAM-Japan deals seen

United Asset Management Corp.’s recent deal with Tokio Marine and Fire Insurance Co. to subadvise the U.S. equivalent of mutual funds in Japan is likely to be just the beginning. A spokesman for UAM in Boston confirmed that the company (See related story, page 9) is talking with other Japanese financial institutions: “It’s possible we’d have something to announce later this year.” Tokio Marine, Japan’s largest nonlife insurer, plans to sell investment trusts in Japan run by up to 10 of UAM’s 53 investment management firms.

Etc.: ING buys U.S. brokerage

n The U.S. subsidiary of Amsterdam-based ING Group said Friday it has acquired Multi-Financial Securities Corp. of Denver for an undisclosed price. Multi-Financial employs 420 brokers in 60 branch offices throughout the United States. . . Investors, beware. Securities fraud costs Americans nearly $10 billion annually, estimates the North American Securities Administrators Association Inc. in Washington. A recent poll of eight state regulators found investor complaints up 30% last year. . .Merrill Lynch & Co. has promoted Robert Dineen to director of mutual fund investment strategy and product group. The new job makes him the New York brokerage’s mutual fund gatekeeper. . .Alliance Capital Management of New York has signed a distribution agreement with Eptaconsors Group, a consortium of six leading Italian banks, to sell Alliance’s offshore funds in Italy.

Corrections

* A story on Page 16 of this issue summarizing first-quarter merger and acquisition activity misidentifies the majority stake buyer of Grosvenor Capital Management LP. The firm was acquired by Value Asset Management Inc. of Westport, Conn.

* A Page 1 story in the April 13 issue misattributed a quote — “It’s extremely frustrating. I can literally sit in my office and hear my staff talking to headhunters all day long” — to William R. McLucas, director of the Securities and Exchange Commission’s enforcement division. The quote was actually from Jack W. Murphy, former chief counsel of the SEC’s investment management division.