Merrill Is Not Divesting MLIM Unit

July 14, 2004 ( - Ahmass Fakahany, Chief Financial Officer of Merrill Lynch & Co., said the firm has no plans to sell-off its asset-management arm, Merrill Lynch Investment Managers (MLIM).

“We are not divesting,” Fakahany told Dow Jones during a phone interview, calling MLIM a “very core part of the business.”   Rather, Fakahany said the Princeton, New Jersey-based investment firm is positioning MLIM to be “a bigger part of Merrill Lynch.”

Questions arose after a New York Times article last month said Merrill Lynch has been exploring the possibility of selling a big stake in its investment management business to Legg Mason.   The market rumors marked another move in the philosophical shift for Merrill, which had previously prided itself on offering every financial service under the sun for its clients.   However, under the tutelage of the firm’s current chairman E. Stanley O’Neal, Merrill has made a concerted effort to cut costs and maximize returns.

To the contrary, Merrill is looking sell its services through third parties, “opening its architecture and making alliances and joint ventures where they make sense,” Fakahany told Dow Jones.

MLIM currently has $488 billion in assets under management, down $25 billion from last quarter’s total.   Fakahany attributed the loss to withdrawals from money-market funds.