Fremont Investment Advisors-which has been operating all year under threat of federal regulatory charges-will sell all of its mutual fund assets to the owner of The Managers Funds under a recently announced deal.

Affiliated Managers Group Inc., a holding company whose properties include The Managers Fund and its 27 sub-advised mutual funds, has a definitive agreement to buy about $3 billion in assets under management from Fremont Investment Advisors, according to the July 14 announcement.

Affiliated Managers said it expects the deal to close by the end of the year, but with the caveat that the completion is subject to the "satisfactory settlement" of the regulatory inquiries.

Fremont Investment Advisors was notified in January that the SEC planned to recommend action against the company in connection with allegations of market-timing arrangements that the company says ended in 2002. In June, the SEC said it also plans to add charges of late-trading by a former employee in 2001 to the complaint. At least one former employee, and one current employee, are believed to be targets of the probe, according to an SEC filing by Fremont.

Adding to the precarious situation at the company, Fremont announced in January 2003 that it was selling off its mutual fund business, deciding it was no longer a good strategic fit with its private investment business.

Most if not all of Fremont's 22 San Francisco-based employees are expected to be retained by The Managers Funds, as will the vast majority of the subadvisors for its 13 no-load funds, according to the companies.

"The employees, I am told, are very excited," says Peter Lebovitz, president of The Managers Fund. "This is a cloud that has been lifted from them."

The purchase will give The Managers Fund a total of 40 sub-advised funds, and the addition of high-profile funds such as the Fremont Bond Fund, subadvised by PIMCO's Bill Gross, the Fremont California Intermediate Tax-Free Fund, subadvised by Evergreen Investment Management, and the Fremont U.S. Micro-Cap and Institutional Micro-Cap funds, subadvised by Kern Capital Management.

"In my humble opinion, it gives us the best fixed income lineup in the world," Lebovitz says.

Bill Fergusson, senior vice president of sales and marketing at Fremont, says the firm is looking forward to joining with a former competitor that shares similar philosophies.

First « 1 2 » Next