BOSTON - FleetBoston Financial is reducing staff by 430 employees in its asset management unit, now called Columbia Management Group. The firm, which acquired Liberty Asset Management last year, also is eliminating 14 mutual funds, liquidating three funds and consolidating 11 others.
Charles Salmans, Columbia spokesman, said the firm anticipated the downsizing after the acquisition of Liberty Asset last year. The staff cuts will be completed by the end of 2002, Mr. Salmans said, with some of the reductions coming through attrition. The firm also is considering additional fund mergers and liquidations as it works on bringing its total number of funds closer to 100. After the most recent changes, Columbia now has 109 mutual funds; the next round of fund mergers could affect the Galaxy fund group, which is the former Fleet Asset Management family of funds.
Most of the downsized employees were back-office and support staff, but some investment professionals were affected, Mr. Salmans said. Deryk Lampe, manager of the Liberty Global Young Investors Fund, and Carl Ericson, manager of the Liberty High Yield Securities Fund, have both left the company this year. Mr. Lampe's fund was liquidated, although Mr. Ericson's fund remains. Laura Ostrander, who was co-manager of the Liberty High Yield Fund along with Mr. Ericson, will take over as lead portfolio manager of the fund.
Also, Glenn Migliozzi, head of fixed income at the former Fleet Asset Management, left the firm late last year as a result of the changes, and the firm is looking for a replacement, Mr. Salmans said. In addition, seven industry analysts left after the reorganization; Columbia is in the process of replacing them, said Mr. Salmans. In March, Columbia hired Robert McConnaughey from Citigroup Asset Management as its new head of equity research, replacing Tom Stakem, who left the firm.
At present, the other portfolio managers affected by the mergers and liquidations remain with the firm. Mr. Salmans said the firm is considering reassignments for some portfolio managers while others might leave the company. He said the firm is not ready to make any announcements at this time.
The funds to be liquidated, in addition to the Global Young Investor, are the Stein Roe Asia Pacific and the Galaxy Pan Asia funds, which have less than $9 million in combined assets. The funds are scheduled to be liquidated in April and May because of insufficient assets and because they are duplicates of other funds in the Columbia family. All changes are subject to shareholder approval.
The 11 funds to be merged are Liberty and Stein Roe funds, which will be merged into other funds with similar investment strategies and objectives. In total, the 11 merged funds have about $5.5 billion in assets. The consolidations are designed to simplify Columbia's universe of portfolios following the acquisition of Liberty and its family of funds.
Among the changes: the Stein Roe Small Company Growth Fund will be merged into the Liberty Acorn USA Fund; the Liberty Contrarian Small Cap will be merged into the Liberty Small-Cap Value Fund; the Stein Roe Focus and Liberty Growth Stock funds will be consolidated into Stein Roe Growth Stock Fund; the Liberty Young Investor and the Liberty Growth Investor funds will be merged into the Stein Roe Young Investor Fund; the Stein Roe High Yield will be consolidated into the Liberty High Yield Securities Fund; the Liberty Income Fund will be merged into the Stein Roe Income Fund; the Liberty High Yield Municipal Fund will be merged into Stein Roe High Yield Municipal Fund; the Stein Roe Cash Reserves Fund will be merged into the Liberty Money Market Fund; and the Stein Roe Municipal Money Market Fund will be consolidated into the Liberty Municipal Money Market Fund.