December 2, 2002

Wells Fargo to Acquire Parts of Montgomery Asset M

Nov. 25, 2002 -- Wells Fargo & Co. (WFC) signed a definitive agreement to acquire parts of the institutional and retail investment management business of Montgomery Asset Management LLC, adviser to the Montgomery funds.

San Francisco-based Montgomery, started as a no-load mutual-fund family, manages $5.7 billion in assets for institutional clients and individual investors. The business lines that Wells Fargo will acquire had $4.9 billion in assets under management as of August 31. Wells Fargo markets its mutual funds through intermediaries.

According to press reports last week from Reuters and Dow Jones, roughly two-thirds of the assets that Wells Fargo will acquire from Montgomery represent institutional investments, and about a third were investments in retail mutual funds. The press reports also indicated that Wells Fargo will acquire Montgomery's fixed-income, small-cap growth and emerging-market equities investment lines, but excluded some of their global funds.

Specifically, the firm would receive Montgomery Short Duration Govt Bond Fund/R (MNSGX), Montgomery Total Return Bond Fund/R (MNTRX), Montgomery Small Cap Fund/P (MNSPX) Montgomery Mid Cap Fund/R (MNMCX), Montgomery Growth Fund/P (MGRPX), Montgomery International Growth Fund/P (MIGPX), Montgomery Inst Srs Internatl Growth Port (MIIGX), Montgomery Global Tech Telecom & Media Fund/R (MNGCX), Montgomery Emerging Markets Fund/R (MNEMX), Montgomery Emerging Markets Focus Fund/R (MNEFX), Montgomery Inst Srs Emerging Markets Port (MIEMX) and Montgomery Government Money Market Fund/R (MNGXX).

Moreover, there will be continuity in the management of the Montgomery fund assets as about 25% of the firm's 135 employees, mostly members of its portfolio management teams, will have positions at Wells Fargo.

Further details from Montgomery were not available.

"Montgomery was one of those upstart fund firms that came out of nowhere about five years ago and has become quite prominent and gained a lot of respect," noted Louis Harvey, president of Dalbar Inc., a Boston-based mutual fund consulting firm. "However, this transaction indicates that a company like Montgomery really needs more scale and more distribution to navigate these treacherous waters that we have today, " he added. "A big company like Wells Fargo provides Montgomery with investment management, but also the all-important distribution network -- I think we will continue to see consolidation in the fund industry."

Terms of the agreement were not disclosed. The transaction is expected to be completed in stages beginning in the fourth quarter. The merger of the mutual funds is subject to, among other things, the approval of the shareholders of the Montgomery funds, and is expected to be completed four to six months after the acquisition.

Montgomery is an investment management subsidiary of Commerzbank AG.

Based in San Francisco, Wells Fargo's Institutional Investments Group -- including Wells Fargo Funds, Wells Capital Management, 401(k) and retirement products, institutional bond brokerage and custody services -- has $278 billion in administered assets, including $130 billion in managed assets, and $83 billion in fund-related assets

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