And the Mutual Fund Beat Goes On

What a surprise! Four years, two months, and and 16 days after Ken Lewis blundered into Boston promising to cut costs, relocate functions, and move Columbia Management to New York, Ken is off golfing, his firm is under, oh, about 16 investigations, and Ameriprise Financial stepped in and grabbed the BoA-neglected Columbia Management family of funds for $1 Billion.

So what's the surprise? No matter who buys them, owns them, sells them, or threatens to move them, Boston's mutual funds never leave Boston because the highly paid, highly skilled employees that work for the funds do not want to and have no reason to. In other words, there is no surprise.

And Ameriprise and Jim Cracchiolo, its apparently asute chief executive, knows that. Rather than come in with threats and pomposity, Mr. Cracchiolo calmly announces that Michael Jones, Columbia’s president, will serve as president of the US asset management business, and that Colin Moore, Columbia’s chief investment officer, will continue to serve in his role AND that the Columbia will remain in Boston.

Cracchiolo knows that Boston is the center of mutual fund expertise. Unlike Ken Lewis, he understands that the best and brightest that Columbia has now and will now attract with Ameriprise as its owner, do not want to move to Minneapolis, the HQ of Ameriprise. And I really like Minneapolis. My college roommate was from Minneapolis. But anyone asked to move to Minneapolis at Columbia has 34 other options, including Fidelity, Wellington, Pioneer, Putnam, State Street Global, GMO, Natixis ( can I stop now..NO?..OK..I'll keep going), Eaton Vance, FLAG Management, MFS, Direxion, Bank of New York/Mellon, Loomis Sayles. OK I'll stop.

And what does this mean to Boston "by Square Foot?" What does this mean to the future of the Boston office market? It means the 115,000 square feet Columbia occupies at One Financial Center stays at One Financial Center. It provides further affirmation that the future of the downtown office market in Boston is very secure because the funds are staying and the funds are growing. It confirms what I am about to release in a formal report: Contrary to chicken little(s), the sky isn't falling in the Boston office market. In fact, we're all floating back up. IN THE THIRD QUARTER OF 2009, THE BOSTON CLASS A MARKET REGISTERED POSITIVE NET ABSORPTION.

See ya Ken. Hello Ameriprise. You're gonna love it here.