Mutual fund firms that were worrying that their fund distribution would be in the hands of a competitor after Citigroup closed on its purchase of Bisys needed have worried at all. Instead, they have scrambled to alert mutual fund shareholders of a little-discussed spin-off deal between Citi and Foreside Financial Group.

The deal between Citigroup and Portland, Maine-based Foreside was sealed on August 1. At that time Foreside renamed Bisys Fund Services as Foreside Distribution Services, LP.

Citigroup purchased the fund distributor as part of its deal to acquire Bisys last spring. It has since also spun off Bisys Retirement business to private equity investor J.C. Flowers. While the J.C. Flowers deal was announced at the time of the Bisys sale, the Foreside side deal has been kept mostly quiet until this month.

Foreside officials disclosed on the company Web site that Foreside purchased Funds Distributor Inc; BISYS Fund Services, Limited Partnership and, two other private-label broker-dealers.

In all, the private transaction moved $125 of fund asset distribution from Citi to Foreside. The new business accounts for roughly two-thirds of Foreside's $175 billion fund distribution business.

According to SEC filings, fund firms that moved under the Foreside umbrella include:

* American Independence Funds Trust
* The Bjurman, Barry Funds
* The Blue Fund Group
* Capital One Funds
* Commonwealth International Series Trust
* The Coventry Group
* The Coventry Funds Trust
* Excelsior Funds, Inc.
* Excelsior Funds Trust
* Excelsior Tax-Exempt Funds, Inc.
* First Focus Funds, Inc.
* Greenwich Advisors Trust
* The Hirtle Callaghan Trust
* HSBC Advisor Funds Trust
* HSBC Investor Funds
* Legacy Funds Group
* Pacific Capital Funds
* STI Classic Funds
* STI Classic Variable Trust
* Vintage Mutual Funds, Inc.


Three Bisys Fund Services clients -- Allianz Variable Insurance Products Fund of Funds Trust, Allianz Variable Insurance Products Trust and American Performance Funds -- did not make the move, according to an SEC filing.

Foreside officials confirmed that 20 Bisys professionals joined it as part of the transaction. Foreside will also open offices in Boston; Bethesda, Maryland and Columbus, Ohio as a part of the sale.

Those executives making the move to Foreside include Brian Bey (president), Elliot Dobin, Andrew H. Byer (CCO), Wayne A. Rose (assistant chief compliance officer) and James E. (Ed) Pike (financial and operations principal).

Coincidentally, Foreside itself is the result of a buyout after a deal with Citi. The bank purchased Forum Financial Group in 2003. Less than a year later Carl Bright and Richard Berthy purchased Forum and they renamed the company to Foreside Fund Services in March 2005. 

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