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Money Managers : BankAmerica Will Sell Off 2 More Units

July 28, 1987|VICTOR F. ZONANA | Times Staff Writer

SAN FRANCISCO — BankAmerica, continuing to dismantle itself in the wake of staggering losses, Monday agreed to sell its two money-management units to Monarch Capital Corp. of Springfield, Mass.

Terms were not disclosed, although one investment banker who requested anonymity estimated that the company, parent of Bank of America, would report a gain of less than $50 million on the deals.

The two units--BA Investment Management Corp., based here, and BA Investment Management International of London--have a total of about $12 billion under management between them.

The total includes about $5 billion in cash-management accounts and $7 billion in stocks and bonds.

Both companies are well-regarded in the industry, and their sale is another blow to BankAmerica's prestige.

Management Interest

Cash management is a low-margin business, with annual fees averaging about 0.15% of assets under management. Fees range from 0.25% and 0.30% for managing stocks and bonds. Thus, the units generated no more than $28.5 million in revenue for BankAmerica last year.

BankAmerica said the managements of the units will have an ownership interest in the firms.

The domestic unit, which employs 65 people, will be renamed Associated Capital Investors and will keep its headquarters in San Francisco.

The London unit, which employs 35, will change its name to WorldInvest. BankAmerica said the staffs of the two companies "are expected to remain intact."

BankAmerica Chairman A. W. Clausen said the sale is part of the company's ongoing program to focus on "core" operations--retail, middle market and wholesale banking on the West Coast, and wholesale banking in the domestic and overseas markets.

Still, one former BankAmerica official said "there were a lot of discussions about how close this was to the core."

In recent years, it has sold off several units to replenish its loss-ravaged capital accounts.

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