CHARLOTTE, N.C. - NationsBank Corp. will manage, through subsidiaries, $30.4 billion in institutional tax-exempt assets when the deal to acquire Barnett Banks Inc. is complete.
Considering how NationsBank has handled other acquisitions, Barnett Capital could become the fifth firm in NationsBank's stable of money managers or it could be sold off, as ASB Capital Management was this summer.
Investment management firm Barnett Capital Advisors Inc., a subsidiary of Barnett Banks, manages $11.2 billion, of which about $2.2 billion is institutional tax-exempt assets. Barnett Capital, formed in July ,1996, handles equal amounts of equity, fixed income and money market investments.
"We are a viable player in the national marketplace and a hidden gem down here in Jacksonville," said Donna Terry, chief investment officer of Barnett Capital.
NationsBank executives won't say yet what they intend to do with Barnett Capital, but they are expected to consider: Barnett's key investment disciplines; its client makeup; how long client relationships have been maintained; how Barnett Capital is structured; and what clients are accustomed to.
The $15.5 billion stock-for-stock transaction between Jacksonville, Fla.-based Barnett and Charlotte-based NationsBank will make NationsBank the third-largest banking company in the United States. The deal is expected to close in the first quarter ..
At $30.4 billion, NationsBank would rank 31st among managers of institutional tax-exempt assets.
NationsBank has four investment advisers: Sovran Capital Management Inc., Gartmore Global Partners, TradeStreet Investment Associates Inc. and Boatmen's Capital Management Inc.
Sovran was NationsBank's first investment management subsidiary, acquired in the 1991 merger between NCNB Corp. and C&S/Sovran Corp. That merger created today's NationsBank.
Richmond, Va.-based Sovran has $4 billion in assets under management, all of which are institutional. Sovran specializes in core fixed-income investments.
To address the international market, NationsBank allied with London-based Gartmore PLC four years later to create Gartmore Global Partners, which conducts international stock and fixed-income investments. Gartmore has nearly $80 billion in assets, of which only $226 million are U.S. institutional tax-exempt.
In fall 1995, NationsBank moved $30 billion from its trust and investment management division into a new subsidiary, TradeStreet Investment Associates Inc. TradeStreet is the multiproduct money manager for NationsBank. Today it has nearly $50 billion in assets, of which about $20 billion are tax-exempt institutional.
Boatmen's Bancshares Inc. of St. Louis was bought by NationsBank last year. NationsBank restructured the money management division that was Boatmen's Trust Co., breaking it into an institutional fixed-income group and a non-institutional fixed-income private client group. The fixed-income institutional manager, Boatmen's Capital Management Inc., started operations in July with $4 billion.
Although Boatmen's and Sovran do fixed income, the styles don't overlap, said Andrew Silton, president of TradeStreet.
If it's determined that Barnett Capital is too much a multiproduct firm, that would mirror TradeStreet, it could be sold. ASB Capital Management, Washington, was acquired by NationsBank when it purchased Baltimore-based MNC Financial Inc. in 1993. NationsBank sold ASB this summer to Chevy Chase Bank, Chevy Chase, Md.