Finance: MUTUAL FUNDS
TABLE: Rough Going
Initially heralded as a dream deal, the Mellon-Dreyfus merger has encountered
some troublesome snags
The Mellon bean-counting culture is colliding head-on with Dreyfus' informal
management style. Some Dreyfus executives question Mellon's emphasis on expense
reduction rather than business promotion.
In a departure from the original game plan, longtime Dreyfus President
Joseph DiMartino has resigned to head the Dreyfus fund boards. He is expected
to be replaced by Mellon Vice-Chairman Keith Smith.
Dreyfus chief marketing strategist Jay DeMartine has quit to take the top
marketing job at Strong Funds. His departure follows the resignations of
numerous other key staffers.
The Dreyfus funds' market share has declined significantly since the merger
announcement. That has caused fees to drop, forcing deeper cost-cutting and
slowing progress on certain key projects, sources say.
Troubles at Mellon's Boston Co., notably a $130 million write-off on
derivatives holdings, has thrown an additional wrench into the deal, adding to
pressure on earnings and distracting Mellon executives.
DATA: BUSINESS WEEK