ST. LOUIS - The new Boatmen's Capital Management Inc. intends to migrate nearly $4 billion in fixed-income assets from the old Boatmen's Trust Co. to the new firm by year's end, said a Boatmen's executive.
That's how much fixed-income money remains with the Boatmen's investment management team since NationsBank Corp. of Charlotte, N.C., bought St. Louis-based Boatmen's Bancshares Inc. The deal closed in January.
The strongest reaction to the sale came from Boatmen's St. Louis-based tax-exempt clients.
Uncertainty about NationsBank's objectives caused a half dozen pension funds to terminate or reduce portfolios with Boatmen's totaling at least $2 billion.
Landers Carnal, president of the new Boatmen's Capital, said, "We've already been through that hiccup." He was chief fixed-income investment officer and executive vice president of Boatmen's Trust.
Executives with Boatmen's Capital say there have been few substantial changes, even though NationsBank has rearranged the organization. The custody business was sold to Banker's Trust New York Corp. About $60 billion in non-institutional fixed-income investments were moved into the private client group, NationsBank Private Investment of St. Louis.
That leaves Boatmen's Capital with about $4 billion in fixed-income institutional assets to be run in an active duration style.
"We are not being swallowed up by another entity. We are not changing our style. Our competitors are free-standing investment management companies and we needed to be a free-standing subsidiary to compete, and have taken that even further by carving fixed income into its own subsidiary," Mr. Carnal said.
And since NationsBank also bought the Boatmen's name, it intends to capitalize on its brand name for Mr. Carnal's well-known fixed-income division. Boatmen's Trust will continue as a legal entity until the funds are moved, then eventually it will be absorbed into NationsBank.
Client defections during the changeover were unfortunate, but they were small because the bulk of the assets was in the personal trust side, said Martin "Sandy" Galt, former president of Boatmen's Trust and now chairman of Boatmen's Capital.
The $626 million St. Louis Police Retirement System terminated Boatmen's in March after two Boatmen's investment executives and several portfolio managers left the group. Boatmen's had managed $268 million, or 49% of the system's assets at the time, in fixed-income and balanced portfolios. Three new managers have been hired to take Boatmen's place.
Boatmen's had handled $1.6 billion for the $12.5 billion Missouri Public School Retirement System until terminating the firm because of personnel turnover concerns.
The $220 million St. Louis County retirement plans, which cover civilian and police employees, hired Wellington Management Co. L.L.P. to manage $35 million in fixed-income assets that had been handled by Boatmen's.
The $320 million United Food and Commercial Workers, Local 655, Ballwin, Mo., reduced Boatmen's portfolio to $70 million from $90 million. Trustees set up a subcommittee to look into Boatmen's and possibly make a report at the September board meeting.
The $35 million profit-sharing/401(k) plan of St. Louis-based J.S. Alberici Corp. terminated Boatmen's and hired Vanguard in August because the plan sponsor wanted bundled services.
The $200 million Teamsters Negotiated Pension Plan Local 688 in St. Louis terminated Boatmen's from its $24 million value equity assignment, and reduced Boatmen's assignment in active duration bonds to $14 million from $21.5 million.