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Affiliated Managers to Buy Fremont Funds

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July 14, 2004 — Affiliated Managers Grp (AMG) said on Wednesday that it has agreed to acquire 13 mutual funds with about $3 billion in assets from Fremont Investment Advisors Inc. Terms were not disclosed.

The funds to be acquired include the Fremont Mutual Fds:Bond Fund (FBDFX), which is run by well-known bond fund manager Bill Gross of Pacific Investment Management Co.

Affiliated is acquiring the funds through its Managers Funds unit, which is the investment adviser for 27 mutual funds with about $5 billion in assets. The affiliate said the Fremont funds will complement its offerings.

Affiliated said it expects “a significant number” of Fremont employees to join the Managers Funds, and that “the vast majority” of Fremont’s investment professionals, including its outside fund managers, are expected to keep their jobs. Affiliated also said it will open an office in San Francisco, where Fremont is based, in connection with the transaction.

Affiliated is buying the Fremont funds while the Securities and Exchange Commission is investigating alleged late trading in the funds. The transaction is subject to “satisfactory settlement” of the “regulatory inquiries,” Affiliated said.

The SEC staff notified Fremont in June that it planned to amend a so-called Wells notice to include allegations that Fremont had permitted late trading by a broker-dealer in 2001, Fremont said in a recent regulatory filing. The notice, issued in late January, indicates the SEC staff’s intention to recommend enforcement action against the firm.

Affiliated expects to complete the deal by the end of the year. The transaction is also subject to approval by Fremont fund shareholders.

Contact Robert F. Keane with questions or comments at:

[email protected].