Today the Birmingham Business Journal reported that Regions Financial Corp., which is headquartered in Birmingham, Ala., is selling off its 11 Regions Morgan Keegan (RMK) Select Funds. These funds are currently managed by Regions’ investment arm, Morgan Keegan & Co., based in Memphis. The funds will be sold to Pioneer Investment Managment, Inc., the Journal reports.
The deal is pending approval by Regions shareholders, but if approved will remove the financial company from the mutual funds business entirely, according to the Journal.
This news follows on the heels of other efforts by Regions to divest itself of investment funds following a series of lawsuits filed last year by investors who claimed RMK investment funds had been misrepresented. The suits allege investment portfolios were presented as low risk, when in actuality they were tied to the high-risk subprime mortgage market. Investors suffered steep and immediate losses as a result.
Just a few months ago, Regions transferred management of a group of its bond funds from Morgan Keegan to Hyperion-Brookfield Asset Managment, Inc., and most of those funds changed to the brand name Helio to reflect the new brand name. Six of those funds also received new trading symbols.
According to the Birmingham Business Journal, the transaction with Pioneer involves a separate group of funds than those now managed by Hyperion.
Bloomberg recently reported that Regions Financial Corp. reported a 23-year-low in New York trading after reporting a record $6.24 billion loss. According to the news report, the losses are blamed largely on bad debt resulting from the collapse in the mortgage-lending industry, with a record number of loan defaults and foreclosures.