Harbor Capital Management Co. Inc., Boston, will sell a majority stake in the firm to Belgium-based Generale Bank.
Definitive agreements are pending, but Generale Bank is expected to pay 1% of its $50 billion in assets.
The bank also has a seven-year option to increase its stake to 75%.
About 85% of Harbor is employee owned; those are the shares being sold to Generale Bank. Eighteen-year-old Harbor has $5 billion in assets under management, of which about $3.9 billion is tax exempt.
Frederick Thorne, a Harbor founder and chairman, said the financial strength of Generale Bank will help Harbor move into the capital intensive global marketplace. Generale Bank is one of Belgium's largest banks.
Harbor employees will retain a significant share of the equity capital, with significant back-end payments for Harbor managing directors. Harbor management will remain the same and the company will be run independently, Mr. Thorne said.
Two-thirds of the Harbor stock will be held by Generale Bank and a third will be held by Fimagest, a French money management subsidiary of Generale Bank that handles equity and bond assets in Europe.
Mr. Thorne said the company's style will remain the same; Harbor is an active large-cap equity and active bond manager.
Generale Bank intends to take a step into the U.S. asset management business with the purchase. The bank will have $55 billion in assets under management after the investment in Harbor.
Harbor will handle U.S. equity and fixed-income products and will serve as a North American base.
In a statement, Generale Bank officials said its European customers can now have their U.S. assets managed domestically, and U.S. investors can receive European and global products.
The Harbor sale announcement comes on the heels of a definitive agreement between Scudder, Stevens & Clark Inc., New York, and the Zurich Group of Switzerland. Zurich's purchase of the U.S. firm is a way into the U.S. money management business and backing by Zurich will give Scudder the chance to expand globally.
