USF&G sells Atlanta firm

October 06, 1992|By David Conn | David Conn,Staff Writer

USF&G Corp. continued its program of paring down and concentrating on its insurance business by selling an Atlanta investment consulting firm to its employees.

USF&G said yesterday that it sold its Lowry Associates Inc. at the end of last month to a group of employees headed by the investment company's president and chief executive officer, Michael T. Wilkinson. Lowry, which has 31 employees, monitors and evaluates the performance of 5,000 investment advisers and helps its clients choose among them.

For the past two years, USF&G has sold off the handful of investment management firms it bought in the late 1980s.

The company, which had grown into one of the largest owners of investment portfolios in the nation, responded to financial problems in 1990 by cutting back on almost all non-insurance related activities.

The Baltimore-based insurer has also sold a majority stake in its Oklahoma oil company, Park Avenue Exploration Corp. Started with USF&Gseed money in 1981, Park Avenue Exploration has been an overall money-loser, including this year when analysts said the Oklahoma City-based unit cost USF&G 12 cents a share in the second quarter.

Last week, Park Avenue merged with a partnership that was 84 percent owned by CIGNA Corp. USF&G and Cigna split the new company, called PetroCorp Inc., nearly down the middle.

CIGNA and USF&G each own 45 percent of PetroCorp, which has $117 million in oil and natural gas reserves. The balance is held by management and employees of the company and by an affiliate of Oppenheimer & Co. Inc.

The deal, nine months in the making, leaves USF&G with no day-to-day management responsibilities and reduces its exposure to any legal liability resulting from PetroCorp's operations, according to Jay Erbe, USF&G's vice president of diversified investments and insurance operations in Baltimore.

The merger will leave USF&G "able to take advantage of any turnaround in the energy industry," he said

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