MSDW Combines Asset Management Businesses

In a realignment of its fund business, Morgan Stanley Dean Witter has placed institutional and individual asset management under one executive. Mitchell Merin, former head of Dean Witters proprietary funds, will oversee all asset management business, including Morgan Stanley institutional and Van Kampen retail funds. This move, along with the departure of several Morgan Stanley and Van Kampen officers

In a realignment of its fund business, Morgan Stanley Dean Witter has placed institutional and individual asset management under one executive. Mitchell Merin, former head of Dean Witters proprietary funds, will oversee all asset management business, including Morgan Stanley institutional and Van Kampen retail funds. This move, along with the departure of several Morgan Stanley and Van Kampen officers last fall, may affect how the former independent investment management companies are perceived in the marketplace.

Other retail firms that distribute Morgan Stanley and Van Kampen funds havent changed their selling agreements with the fund companies. But sources say MSDWs direct management may be a deterrent to distribution outside the parent companys retail force.

One West Coast PaineWebber broker, who has sold Morgan Stanley and Van Kampen funds in the past, says at least one PaineWebber fund wholesaler has mentioned Dean Witters connection with Van Kampen funds in an effort to discourage their use.

There are some offices that wont even let [the Van Kampen wholesaler] in since the merger, the PaineWebber rep says. Some guys are saying, Why should I sell your funds? Were competing against you.

MSDW reps counter that the derision is all part of the fund marketing game. MSDW has used the same logic to pressure brokers to sell in-house products in the past, but has eased up recently, according to reps.

For years [Dean Witter has] been saying to reps, Youre better off selling our funds, because theyre not going to be sold off to a competitor, says a MSDW rep in the Southwest. This rep adds that the firm has backed off completely on pressuring us to do in-house stuff.

While Van Kampen execs would not comment by press time, outside consultants say it will be critical for Morgan Stanley and Van Kampen to maintain their reputations as competent and independent investment management companies.

Everybody knows [Morgan Stanley and Van Kampen] are part of the Dean Witter organization, says Jean Sullivan, a consultant at Cerulli and Associates in Boston. If they maintain the division between the distribution lines [and] play down the affiliation with Dean Witter, they could avoid alienating any distributors.

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