Travelers' acquisition of Salomon would bring together eight small to midsize pension fund investment managers, catapulting them as a group to be one of the largest active managers with nearly $50 billion in tax-exempt assets.
Travelers and its Smith Barney unit own Smith Barney Capital, Smith Barney Investment Advisors, Greenwich Street Advisors, First Madison Advisors, Peachtree, Travelers Insurance and Travelers Investment Management. Salomon owns Salomon Asset Management and has a stake in Mastholm Asset Management.
The group also would have the Smith Barney Consulting, which serves as a fiduciary with discretion to pick money managers for some $100 billion in assets of tax-exempt clients.
The Travelers-Salomon deal could affect an alliance between Fidelity and Salomon. Salomon agreed to become a major source of research for Fidelity Spartan Brokerage and give Fidelity access to Salomon-managed IPOs. Travelers, with its Smith Barney brokerage subsidiary and mutual funds, likely will review this arrangement.
Travelers and Salomon executives could not be reached for comment.