The merger of Norwest Corp. and Wells Fargo & Co. will bring together two different approaches in asset management organization.
Minneapolis-based Norwest owns all of, or a substantial interest in, six investment managers. In total, Norwest's units manage $58 billion.
Wells Fargo, San Francisco, has only one investment management unit, Wells Capital Management Inc., managing $44 billion.
With seven money managers between the two banks, the hands-off business approach of especially Norwest augurs against consolidation of the investment units. Observers also don't expect a wave of departing disenchanted key staff.
Executives at both companies expect the investment units will remain separate, although there have been no discussions about the future money management structure yet.
Jay Kiedrowski, president of Norwest Investment Management & Trust, which oversees most of the company's money management units, said he wouldn't expect the merger to cause departures in investment staff. Four of the six investment management firms report to him.
"We haven't lost a key portfolio manager in 10 years, because they are motivated from a sense of owning the business," said Mr. Kiedrowski, noting Norwest's structure of independent money management units.
Norwest is interested in building or buying more investment management groups, said Mr. Kiedrowski, who also is chairman and president of Norwest Investment Management Inc.
"We are having significant discussions with 10 managers" about forming new Norwest units, he said.
Robert Bissell, president and chief investment officer, Wells Capital, and Mr. Kiedrowski said the two banking companies haven't set up merger transition groups and executives haven't been in contact with one another yet to discuss the ultimate structure of the investment units.
In the custody business, the two banking companies also diverge.
Norwest is a major custodial bank for U.S. institutional tax-exempt clients, ranking eighth in a Pensions & Investment survey last fall with $100 billion in master trust and master custody assets.
In terms of new tax-exempt master trust or custody business last year, Norwest gained $4.62 billion in assets, ranking 10th.
Wells Fargo, after selling much of its custody and trustee business to Bank of New York because of the high cost of keeping up with technology demands and competition in the market, has focused primarily in the smaller pension fund market for its trustee services.
Amru Khan, senior vice president and manager-institutional trust group of Wells Fargo, said the bank has $37 billion in employee-benefit custodial and trustee assets. Of that, $17 billion is from defined benefit plans and $20 billion from defined contribution plans.
For the defined benefit market, Wells Fargo is focusing on smaller corporate plans, about $100 million in assets. But for the defined contribution market, Mr. Khan said Wells Fargo puts no limit on the size of plans it is targeting.
Neither is a big player in the defined contribution market.
Eileen Delasandro, managing director at Quadra Capital Partners LP, Boston, thinks the Norwest-Wells combination will keep its investment management units separate units.
"Norwest has kept a hands-off position and let (its money managers) run their own shops," she said. "The money managers at Norwest have a good record."
"Norwest has a legacy of cultivating talent internally and allowing them to spin out to form firms. These firms are autonomous. The operate independently of Norwest, even though Norwest is the owner. Norwest leaves them alone," said KC Connors, vice president, Jeffrey Slocum & Associates Inc., Minneapolis.
With Norwest's chairman becoming the chairman of the new combined banking group, she said, "I suspect they will probably run the organization in Norwest's approach to have many managers in many different styles under one umbrella."
Both banking companies have similar amounts of mutual funds. Norwest has the Norwest Advantage funds, totaling $21 billion, most of which is managed by various Norwest units.
Wells Fargo offers the Stagecoach mutual funds.
Some $22 billion of the Stagecoach's funds total $26 billion in assets are managed by Wells Capital.