NEW YORK - Clients of CS First Boston Investment Management don't expect a proposed restructuring to affect their portfolios.
And, BEA Associates, New York, will continue to operate separately, said Gail S. Quinn, a Credit Suisse spokeswoman. BEA has $21.3 billion in management in global equity and fixed income. It is a wholly owned subsidiary of Credit Suisse, the other subsidiary of holding company CS Holding Group, Zurich.
CS First Boston plans to merge its investment management business with that of Credit Suisse. At their annual meeting last week, the board of directors of CS Holding approved the move. The board also voted to leave the municipal bond business, close offices in Miami, Dallas and Washington; and sell its operations in Puerto Rico and its domestic equity business in Australia.
Information about the specifics was hard to come by, but institutional clients of CS First Boston Investment Management said they have been assured by company executives that management of their portfolios won't be affected by the changes. They said they expect the portfolio managers handling their accounts to remain in place, despite the consolidation and a previous announcement by CS First Boston that it would cut approximately 15% of its work force.
"We are comfortable that there will not be a change in the actual personnel and oversight of our account," said Julie Dellinger, executive director of the $1 billion Montgomery County Employees' Retirement System, Rockville, Md. She said the fund is not planning a special review of the $50 million high-yield bond portfolio managed by CS First Boston.
"The equity relationship between Credit Suisse and First Boston will change a little bit with regard to some of their asset management activity, but I don't think at this point there is any reason to believe that it will be material to our relationship," said Ash C. Williams Jr., executive director of the Florida State Board of Administration, Tallahassee. He added he understood the investment management operations would become wholly owned by Credit Suisse.
Mr. Williams said Florida officials had been briefed by phone about the restructuring. He said they don't expect any staffing changes as a result. CS First Boston manages approximately $350 million in mortgage-backed securities for the $39 billion fund.
The changes are part of an effort to restructure CS First Boston Corp., which posted disappointing year-end results for 1994. Profits for CS First Boston Corp. were down more than 50%, to $156 million from $328 million in 1993, and return on equity dropped to 11%, nearly one-third 1993's level of 32%.
The board of directors noted the firm had suffered from lower fixed-income profits along with the rest of the industry, but added investment management functions in the United States had also showed poor performance.
Credit Suisse itself is undergoing a restructuring of its asset management operations, which is expected to be completed by March 1.
Credit Suisse Asset Management, the company's money manager, is being absorbed into the firm's private banking group, said Credit Suisse's Ms. Quinn. The reason: to increase efficiency and make the product easier to present to prospective clients through the banking group, which already is involved in relationship management, said Ms. Quinn.
