(April 23) – “Switzerland’s Zurich Financial Services Group is seeking a merger partner for Zurich Scudder Investments, a move that may be viewed as a tacit acknowledgment that its asset-management push hasn’t lived up to expectations,” writes Nikhil Deogun in today’s Wall Street Journal.

“Though no deal is imminent, people familiar with the matter say Zurich is considering a range of alternatives for Scudder, which has been hit with billions of dollars in outflows from its funds.”

“The Swiss parent isn’t necessarily giving up the asset-management business, and in fact is eager to bolster its position in the U.S. As a result, the leading scenario is for Zurich to acquire another money manager, merge it with Scudder and retain a large equity stake in the combined entity. Such a move would allow Zurich to stay in the business, get new management and avoid the embarrassment of selling Scudder for a meager price just a few years after buying it.”

“A person familiar with the matter says Zurich could decide to keep Scudder, based in New York, and fix the business instead of pursuing a merger-related transaction.”

” ‘Asset management is one of Zurich’s core businesses,’ said Shannon Bell, a spokeswoman for Zurich. ‘We’re always looking for opportunities in asset management, but there are no specific plans at this time.’ “

“Zurich’s search for a merger partner comes as other European companies have intensified their desire to build up their U.S. money-management presence. Most recently, France’s Societe Generale SA struck a deal to acquire closely held TCW Group, Los Angeles, and last year German insurer Allianz AG snapped up Nicholas-Applegate Capital Management and Pimco Advisors.”

“Zurich, though, was one of the first Europeans to make a big move in the U.S. by acquiring Kemper Corp. in 1996 for $2 billion and a year later paying $2 billion for Scudder, Stevens & Clark. Scudder and Kemper were merged to form Scudder Kemper Investments, which later changed its name to Zurich Scudder Investments.”