Zurich Financial Services may be shopping its Threadneedle Investment Services unit. Word that the London-based manager may be on the block was first circulated today by Dow Jones Newswires. The report also suggested that two German banks -- HVB Group and Commerzbank -- may be willing to sell their asset management arms in the future.

The report adds that American firms currently in the market for European asset managers include Amvescap, Franklin Templeton Investments, Mellon Financial Corp. and American International Group. Jack Klinck, chairman of Mellon Europe, confirmed to the new service that the firm is currently "looking at acquisitions in Europe."

Zurich officials declined to comment on the report. Both HVB and Commerzbank said their units are not for sale.

The article claimed that the European fund industry may be about to undergo a consolidation and that the sales would be driven by insurers and banks seeking to unload struggling fund divisions. It also cited Jean-Baptiste de Franssu, chief executive of Invesco Europe, as predicting that the industry will start to see deals in the next 18 months.

Up until now a lack of targets, not a lack of appetite to do deals among acquirers, kept the mergers market quiet, Franssu told the news organization. There are signs that the Europeans are turning from buyers into sellers.

Last year Zurich unloaded its Scudder unit (although in that case the buyer, Deutsche Bank, was also European). Germany's Commerzbank sold Montgomery Asset Management to Wells Fargo in November. More recently Skandia unloaded its American Skandia unit to Prudential. Ian Brimecome, head of investment banking at Putnam Lovell NBF in London, points to any banks not in the top ten in Europe as possible sellers.

Germany's HVB Group may consider selling its Activest unit as only 25 percent of the funds purchased through its retail bank clients are managed by the proprietary asset manager. Meanwhile, Commerzbank may also consider selling its Cominvest asset management business, although the bank told to Dow Jones that the unit is not for sale.  

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