Is there a lawyer in the house? Yes, lotsOn Aug. 11, USF&G...

BANKING & FINANCE

September 03, 1992|By David Conn

Is there a lawyer in the house? Yes, lots

On Aug. 11, USF&G Corp. finished what has become a routine chore: selling off one of its asset management subsidiaries, in this case Tarrytown, N.Y.-based Axe Core Investors Inc., the main unit of Axe-Houghton Management Inc.

What distinguished the sale, to Axe Core's management, was that no Piper & Marbury lawyers were present, according to Axe executives. The Baltimore law firm, USF&G's primary outside counsel, is the biggest loser in the insurance company's two-year effort to cut costs by building up its staff of in-house counsel.

Since Chairman Norman Blake took over, the company has hired about 16 attorneys, five of them from the now-defunct Frank, Bernstein, Conaway & Goldman. That brings USF&G's in-house staff to about 25, said general counsel John MacColl.

While the company still hires outside counsel to do claims litigation, that work is being supervised more closely by USF&G lawyers, Mr. MacColl said. The new philosophy, which mirrors that of Mr. Blake's ex-employer, General Electric, is hitting hardest in the tax, corporate and real estate work that used to be Piper's domain, according to lawyers inside and outside USF&G.

Piper partner Larry Scriggins, who serves on USF&G's board, did not return phone calls. So the Japanese government says it will spend 10.7 trillion yen ($87 billion) to revive its economy. So what does that mean for us?

For shareholders in T. Rowe Price's new Japan Fund, now holding about $42 million, it means a 10.8 percent total return in August, as the Nikkei stock index soared about 25 percent in response to two weeks of leaks about the proposed investment.

Of course, that one-month return merely answers the question, "What have you done for us lately?" From a slightly longer perspective -- the fund's Dec. 31, 1991, birth date through the end of July -- the Japan Fund dropped 17.7 percent of its value, according to George Murnaghan, a vice president at Price's international unit, Rowe Price Fleming International, and an adviser to the fund, which is run from London and Tokyo.

It should be noted that during the same period the Morgan Stanley Japan Index fell 29.0 percent, Mr. Murnaghan said, adding that the fund managers are not focusing on short-term fluctuations but instead are keeping only 10 percent to 15 percent of the assets in cash.

"Our idea is not to try to be too cute with the timing," he said. "Obviously there's been a lot of chances to be a hero, and lots of chances to be stupid, too."

ABS partners ponder starting new fund

Robert Walkingshaw and Edward Anderson, two-thirds of the partners at venture capital firm ABS Ventures, are talking about starting their own fund, according to a venture trade magazine. ABS, with offices in Baltimore and a Boston suburb, is Alex. Brown Inc.'s venture capital affiliate.

In its August edition, the Venture Capital Journal quoted managing general partner Bruns Grayson as saying that ABS would survive if the other two went their own way. "Alex. Brown ought to have and will continue to have a presence in the venture capital business," he told the magazine.

An employee of ABS said Mr. Walkingshaw was in Boston this week talking with Mr. Anderson, but that regardless of their decision, both men would continue to work with the portfolio companies in ABS's three venture funds, which raised more than $150 million in the last 10 years.

Several members of Baltimore's venture industry confirmed that Mr. Walkingshaw and Mr. Anderson have been talking about starting their own fund in Boston. The three ABS partners did not return calls yesterday.

Maryland bankers head for Washington

What has John Bowers been doing during his summer vacation? Organizing the Maryland Bankers Association's fifth annual "Washington Visit." The two-day trip, scheduled for Sept. 16 and 17, will bring between 35 and 40 Maryland bankers to the nation's capital to hear and be heard. Mr. Bowers, the association's executive director, said he has a full schedule planned for those who attend.

Key issues bound to be debated are proposals to allow national interstate branching, expand bank powers to sell some non-bank products and services, and favorable tax changes, all of which the MBA supports.

Wednesday starts with a pre-breakfast briefing by Karen Shaw of Washington's Institute for Strategic Development, a banking research company. Then it's on to a briefing with the American Bankers Association until noon, followed by a lunch with the Conference of State Bank Supervisors, whose host will be the group's current chief, Maryland Bank Commissioner Margie Muller.

Thursday schedule includes breakfast with acting FDIC Chairman Andrew "Skip" Hove Jr. (two days after his board is scheduled to vote on a proposed 22 percent average increase in deposit insurance rates), a meeting with Office of Comptroller of the Currency staff members and afternoon sessions with Maryland's congressional delegation.

"They usually are pretty worn out by the time we finish with them," Mr. Bowers said.

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