NEW YORK - In combining the investment management businesses of Chase Manhattan Corp. and J.P. Morgan & Co. Inc. into J.P. Morgan Fleming Asset Management, there will be few changes on the equity side, but wholesale integration of the fixed-income and cash businesses into a single global process.
Morgan Fleming manages $640 billion worldwide and is the combination of the largely institutional J.P. Morgan Investment Management unit; the mainly retail business of London-based Robert Fleming Holdings, which Chase bought in 1999; and the cash and fixed-income investment operations of Chase.
Ramon de Oliveira, who had been chairman of J.P. Morgan Investment Management, was named chairman of asset management services in September when the merger was announced. Morgan's Ronald R. Dewhurst continues to head asset management for the Americas and Paul T. Bateman, from Fleming, heads asset management for Europe, Asia-Pacific and Japan.
As expected, when they started to examine the money management companies thrown together by the merger, the integration team found very little overlap in the equity investment style and operations of JPMIM and Fleming.
JPMIM's domestic and international equity investment style is core to value-oriented, and Fleming's is core to growth-oriented. Fleming has a small but strong emerging markets strategy as well as a growth EAFE strategy. JPMIM has a strong institutional presence in the United States, while Fleming has a strong retail presence in Asia-Pacific and Europe, Mr. Bateman said.
Messrs. Dewhurst and Bateman stressed that the equity management style of both companies will be left undisturbed. While the former Fleming growth managers and the former JPMIM value managers might move to be in the same buildings, they will not be combined. "We want to keep the processes separate. They won't be contaminated," said Mr. Bateman.
Investment staff won't be affected, but limited layoffs are imminent in marketing, client service, back-office and administrative functions, said Mr. Bateman. He wouldn't say how many people would be cut.
As a result of the merger, JPMIM now has a Fleming growth equity product to promote in the United States in separate account and mutual fund formats. Mutual fund development and third-party distribution are areas of early focus by Morgan Fleming, said Mr. Dewhurst.
From New York, Fleming will continue to develop its capabilities in managing U.S. equities for non-U.S. clients. It runs $5 billion in U.S. growth equities, said Mr. Bateman, but will benefit from JPMIM's institutional background when it comes to marketing to pension clients in Europe and Asia. Fleming runs $80 billion in Europe and $65 billion in Asia-Pacific, mainly for retail clients.
Alternative investments - real estate, private equity funds of funds and hedge funds - have been combined in a separate entity, J.P. Morgan Partners, New York.
In creating a single global fixed-income investment platform, Morgan Fleming staff picked JPMIM's investment process as the model.