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Evergreen Builds Institutional Business

Three months after combining its institutional asset management division with its retail asset management unit, Evergreen Investments is progressing with its plans to build its institutional business.

Earlier this month it hired three sales and marketing executives and introduced a money market fund for institutional clients which has a late trading day cut off of 5:00 p.m. This is the first extended trading day money fund the group has offered.

Evergreen Investments is the asset management arm of First Union Bank of Charlotte, N.C.

Evergreen wants to build its institutional business to further take advantage of the abilities it now has on the retail side, said Pat O'Brien, who was hired as president of Evergreen's institutional sales in December.

"We are seeking to unify the approach and achieve on the institutional side what has been achieved on the retail mutual fund side," he said.

First Union announced on Dec. 1 that it was combining its First Capital Group institutional asset management division with the bank's Evergreen Investments retail asset management unit. The combined unit managed $122 billion as of the end of 2000. Approximately $88 billion of that were assets held in the Evergreen Funds. Institutional mutual funds and separate accounts accounted for about 28 percent of the total assets managed, or $34 billion.

Evergreen has no intention of abandoning its retail asset management business, said O'Brien.

"There is a renewed interest to build out the institutional side because we have not tapped the potential there," he said.

The firm has come to appreciate the growth of the quasi-institutional separate account and wrap account marketplaces that generally create investment programs for investors with $100,000 or more in assets, O'Brien said.

"That's an area in which we see assets flowing away from mutual funds to separate accounts," O'Brien said.

Evergreen is building its products and services for retirement plans, public funds, endowments, charitable organizations and foundations as well as paying more attention to the pension consulting firms. The firm is also trying to increase its share of the healthcare and insurance markets, said O'Brien.

One area of particular interest for Evergreen is in broadening its money market fund offerings to institutions, O'Brien said. On March 1, the firm introduced its institutionally oriented Evergreen Cash Management Money Market Fund, which allows investors to buy or sell shares until 5:00 p.m. each day. The fund is aimed at direct institutional investors such as corporate trust and treasury departments as well as other financial service providers, such as broker/dealers, that do not have their own proprietary money market funds, said O'Brien.

Since its launch, the money fund has attracted $55 million, already more than a quarter of the $200 million O'Brien anticipated the fund would accumulate by year-end. There are no plans currently to extend the trading windows on any other Evergreen institutional money funds, he said.

Evergreen plans to hire several more salespeople, in addition to the three recent hires, within the next few months, said O'Brien. Evergreen is seeking an individual to lead its separate account area and one or two more wholesalers for the consultant marketplace, O'Brien said.

The hires earlier this month included Craig Truitt, who on March 6 became managing director of consultant relationships for Evergreen after nine years with Tattersall Advisory Group, the predominantly fixed-income investment management subsidiary of First Union, in Richmond, Va. He will coordinate and cultivate relationships with pension and retirement plan consultants nationwide. At the same time, Evergreen hired Sheri Cobb as vice president of institutional marketing. Cobb, who reports to Ruth Papazian, Evergreen Investment's senior vice president and director of marketing, will be responsible for new institutional marketing and business development initiatives, said O'Brien. Jim Cornelius was hired as the new national director of money fund sales. Cornelius came from First Union's corporate trust division.