MAM to expand Merrill branding

MERCURY ASSET Management, the City fund management group acquired by the American investment bankers Merrill Lynch, is considering dropping the "Mercury" name from some products and markets. It will instead selectively market itself solely under the Merrill brand name.

The group, which is under pressure to justify the $5.2bnpaid for it in November 1997, has already started the process by branding itself in the United States Merrill Lynch Mercury Asset Management, while retaining its traditional name of Mercury Asset Management in the UK.

But any move to drop "Mercury" altogether in new markets will increase the possibility of the Mercury brand ultimately being phased out worldwide in favour of Merrill Lynch.

MAM's co-heads, Stephen Zimmerman and Carol Galley, are keen to take advantage of Merrill's ownership to develop new sales channels as well as expand its business in countries like Germany where the equity culture is starting to take off. They have ambitious plans to launch a range of package products in the next few months which will be sold through other financial intermediaries in Japan, Europe and the US.

There is a recognition that the Mercury brand, while strong in the institutional market both in the UK and the US, is virtually unknown in the retail market in Europe and Asia.

A confidential broker's report by the rival firm Morgan Stanley says that with Merrill's backing Mercury is in a strong position to expand its business both in the US institutional market and in retail.

However, the report's author, Henry McVey, says questions remain: "In particular, what is the right way to brand Mercury in the retail market, particularly given that its heritage is in the traditional institutional market?"

Merrill's own US asset management business is one of the largest but it has been losing ground to rivals.