Comerica joins others in selling fund units to focus on fee-based business. Detroit-based commercial bank Comerica has sold its mutual-fund management affiliate Munder Capital to the firm's management and private-equity firm Crestview Partners in exchange for $302 million and full ownership of Munder's passive-investment unit World Asset Management.

Comerica first acquired part of Munder in 1994. In the late 1990s, Munder became known for its high-flying NetNet Internet-stock fund. Now its biggest fund is the Munder Mip-Cap Core Growth fund, with about $1.8 billion in assets. Other funds focus on energy, international equity and technology.

World Asset was originally a part of the trust division of Manufacturers Bank and became part of Comerica when the banks merged. World Asset Management was made a part of in 2001.

The sale follows an emerging trend among banks and brokerages to ditch investment-management units, fueled by increased interest in asset managers from private-equity firms.

Looking upmarket

Using today's numbers, Munder will come out of the deal managing $25.1 billion of the $41 billion in assets. The $15.9 billion balance stays with Comerica under World Asset's management -- and adds Comerica's chairman and CEO Ralph Babb, Comerica will continue to distribute all of Munder's investment products.

Comerica will use the sale proceeds "to advance its strategy of investing in growth markets and businesses" and to buy back its own stock, says Babb.

Dennis Mooradian, head of Comerica's high-net-worth and institutional management unit, seems keen to make the point that Comerica clings to investment manufacturing efforts that support high-net-worth clients.

"Comerica has a highly effective wealth management platform, which includes Comerica Asset Management, our proprietary asset management division; Wilson Kemp & Associates, a boutique asset manager focused on private and institutional clients; and World Asset Management," Mooradian says in a press release. "Comerica will continue to drive growth in our investment management businesses through our open architecture platform, which makes available a wide array of investment alternatives for individual and institutional investors, including Munder's products."

Morgan Stanley was financial advisor to Comerica on the transaction. Wachtell, Lipton, Rosen & Katz acted as the bank's legal advisor.

Grail Partners, which advised Munder's management team, will also invest in the buyout.

Comerica offers banking services in Michigan, California, Texas, Arizona and Florida, and businesses offering -- including brokerage and wealth-management services -- in those states, in several others and in Canada and Mexico. --FWR

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