CHICAGO - Zacks Investment Research Inc., Chicago, is making its first of what could be two moves into traditional money management, using its own research.
To start, it teamed up with Reich & Tang Capital Management Inc., New York, to offer an equity investment fund.
Separately, Zacks wants to create its own mutual fund and is seeking a partner company to handle distribution, said Leonard Zacks, president and chief executive officer.
In the venture with Reich & Tang, it is offering a unit investment trust based on the 39 top equity picks of Zacks analysts. The stocks include Boeing Co., Citicorp, PepsiCo, IBM Corp., and Eli Lilly & Co.
The trust will stay open for investment for the next two months, its size depending on how much money it raises before the closing. The stocks will be held in the trust for 13 months, when it will be liquidated, he said. Zacks and Reich & Tang then envision starting another unit investment trust.
On the mutual fund, Mr. Zacks said his firm wants to manage one. He declined to say how close it is to putting together a deal with a distributor or with which ones he has talked.
Mr. Zacks said he doesn't think either the Reich & Tang move or the mutual fund proposal would have any impact or conflict with his firm's traditional business of selling research to institutional investors.
One institutional user of Zacks research, Robert G. McVicker IV, vice president at Oak Ridge Investments Inc., Chicago, which manages about $300 million, said he doesn't think the Zacks funds pose a conflict with research clients.
Zacks isn't unfamiliar with money management. In non-traditional investments, Zacks has been managing a hedge fund, which has $80 million.
