USF&G Corp. said yesterday that it is doubling the number of mutual funds it offers to 12 but that the move was in the works before the departure of former Chairman Jack Moseley and doesn't indicate the direction USF&G's new chief executive, Norman P. Blake Jr., will take the state's largest insurance company.
"We're having a business review, but this has been in the works for a long time," said Kerrie Burch-DeLuca, spokeswoman for Baltimore-based USF&G. "Our business review is not complete."
USF&G has had its profits and stock price pounded by a downturn in the cyclical property-casualty insurance business, as well as by losses on real estate and high-yield bond investments.
Mr. Moseley stepped down as chairman Nov. 7, and Mr. Blake was recruited from Heller International Corp. of Chicago to replace him later that month.
USF&G has six mutual funds with about $740 million under management, said Richard E. Smith III, president and chief executive of USF&G Review Management Corp., a subsidiary that will manage the funds and oversee the investment advisory firms USF&G has hired to make day-to-day investment decisions.
Mr. Smith said the new funds should help USF&G's mutual fund business sustain 10 percent to 15 percent annual growth in assets under management through the 1990s. He said that pace would lag behind the mutual fund industry's growth rate during the 1980s but would be as high as or higher than the growth rate he expects for the industry in the near future.
USF&G began the move to expand its mutual fund business in 1989, Mr. Smith said.
The Baltimore company bought Review Management Corp. from a company linked to the Rockefeller family last year. As part of the deal, USF&G acquired Review Management's network of broker-dealers, who sold funds managed by Review Management.
USF&G has since started selling the mutual funds it offered before the acquisition through Review Management's dealer network, Mr. Smith said. Previously, USF&G's mutual funds were sold by direct mail and telephone marketing.