A TOP UNIT TRUST SELLER: NIKE COULD EYE SALE WITH FOUNDER’S LOSS

The country’s second biggest seller of unit investment trusts should weather the death of its founder, Robert Van Kampen, but a key executive left the door open this week on a possible sale or strategic alliance.

Mr. Van Kampen, who died at age 60 on Oct. 29, launched Nike Securities LP of Lisle, Ill. in September 1991 by purchasing the unit trust business of former partner Clayton Brown and using his connections with regional broker-dealers to strike distribution agreements.

Mr. Van Kampen’s estate and other family members retain a controlling stake in the business, which is overseen by Van Kampen Asset Management Co., a family investment office. Mr. Van Kampen set up the office after he sold money manager Van Kampen Merritt Companies Inc. to Xerox Corp. in 1984. (Oakbrook Terrace, Ill.-based Van Kampen Investments Inc. is now a unit of Morgan Stanley Dean Witter & Co.)

Nike chief executive James Bowen and four other senior managers, along with two outside limited partners, hold stakes entitling them to 74% of Nike’s estimated $9 million in annual profits. David Wisen, a Van Kampen son-in-law, oversees the family’s investments and businesses, which include Chicago-area real estate, Wisconsin farm land, equity and bond holdings and a private securities trading firm. Another son-in-law, Scott Pierre, heads the family’s extensive religious ministries.

“The Van Kampen family continues to have a high level of confidence in the leadership of Jim Bowen,” says David Allen, general counsel and senior vice president with Van Kampen Asset Management in Wheaton, Ill. “The family’s intent is to stay out of the way and let him continue the job of running the business.” Mr. Bowen, 44, earned a physical education degree from Wheaton College and worked as a trading floor manager for Chicago futures brokerage Heinold Commodities before eventually joining Nike.

Mr. Allen left open the door to an eventual sale or some other strategic alliance, if Nike management backed such a move. “If Mr. Bowen in his leadership wanted to bring an idea to us we will be very interested to sit down and talk with him,” he says.

“Bob was not involved in the day-to-day operation of Nike Securities for some time now,” says Andrew Roggensack, national sales manager. “The ownership and management of Nike will remain the same going forward.”

Mr. Bowen didn’t return calls seeking comment.

Nike sells more than $5 billion a year in unit investment trusts — closed-end funds with pre-set stock or bond portfolios that have terms of one to five years — and administered $15.2 billion in UIT assets through October. Merrill Lynch & Co. is the industry leader with about $18 billion. Nike also manages $125 million in UIT-based variable annuities sold through Aegon USA, Ohio National Financial Services Inc., Jackson National Life Insurance Co. and American Skandia Life Assurance Corp.

Based on estimated pretax profits of $9 million, Nike could fetch $45 million to $63 million in a sale, says an industry insider.

Increased scale has grown more important for UIT issuers as sales charges — and thus gross profit margins — have contracted to an average 0.75% of assets, from 2% a decade ago.

“Margins are stable, but in the long run they will probably be subject to the pressures of the whole industry,” says Bill Adams, executive vice president for UITs and closed-end fund sales at John Nuveen Co. in Chicago.

But UIT sales continue to expand through interest in specialized equity portfolios that invest in sectors like biotechnolgy, financial services, energy and electronic commerce.

“This product category is gaining wider acceptance and sponsors are coming up with creative new ideas that are drawing attention and assets,” says Mr. Adams.

Their growing popularity is attracting new deep-pocketed players. Later this month, the U.S. mutual fund unit of ING Groep NV will acquire the UIT business of Nvest’s Reich & Tang Asset Management LP.

Nike has also bought some competing firms. Last December, the company acquired the unit trust business of Lincoln National Corp.’s Delaware Management Holdings, which had bought it from Minneapolis-based Voyageur Cos.