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Rating:AFBA's Morrison Discusses the FBR Deal Not Rated 5.0 Email Routing List Email & Route  Print Print
Monday, December 14, 2009

AFBA's Morrison Discusses the FBR Deal

Reported by Patricia Kelly

In the wake of Monday's morning news that FBR Financial was acquiring the AFBA 5Star funds, AFBA president and CIO Bob Morrison spoke to The MFWire about the deal.

Bob Morrison
President and CIO
“We thought at this point and time that it was in the best interest of our shareholders to merge with a great firm that would ultimately benefit our relationships with our association and our shareholders," Morrison said in an interview. “This represented an opportunity to cut costs with our shareholders as well," he added.

Philadelphia-based law firm Stradley Ronon served as AFBA's legal advisor, Morrison said. AFBA did not enlist a financial advisor to do the deal.

AFBA offers six funds. Morrison revealed that two of those funds -- Total Return Bond and Balanced Fund -- will continue as standalone funds bearing the FBR brand, while the other four funds will be merged into existing FBR offerings.

“AFBA is a very interesting organization as we're affiliated with the military but not a government entity much like a USAA," Morrison said. "We launched our funds, which are all sub-advised, ten to twelve years ago making them available to members of the armed forces benefit association but then broadened access to the funds a few years ago."

The unique nature of the funds and their association with the Armed Forces Benefit Association was the focal point for the firm in considering various suitors. While AFBA narrowed its list down to a handful of firms, FBR ultimately emerged the victor.

“We conducted a rather exhaustive search for a partner firm and narrowed it down to FBR," Morrison said. "We were looking for a firm that would embrace the shareholders as much as we have...obviously being a different type of organization our affinity for our shareholders is a bit different than most funds. We need a firm that would ensure our shareholders would be remain the first priority and ensure reduced pricing."

Morrison also stressed AFBA's desire to communicate a strong message that this merger does not signify a defeat, but rather is a strategic move designed to bolster the funds' and shareholders' positions.

Although Morrison sounded optimistic about the fate of the mutual funds' employees, which numbers about ten, he was unable to confirm specific details regarding any changes affecting headcount or senior management shifts.  

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