Financial Research Corporation just found a new home without leaving Boston. Sales and relationship management chief Deborah Wetherbee confirmed that Citigroup just sold the mutual fund research specialists to nearby Mercatus, a "private equity investing and strategy consulting firm" focused on "retail financial services." And Wetherbee doesn't expect big changes at FRC in the wake of the deal. The FRC brand will remain.

Mercatus founder and managing partner Robert B. Hedges, Jr. and spokespeople for Mercatus and Citi all could not be reached for comment on the sale, which closed Thursday. The identity of Citi's and Mercatus' bankers, if any, for the transaction could not immediately be determined.

MFWire first reported that FRC was on the block two months ago (see MFWire, September 23, 2008).

According to Wetherbee, all of FRC's roughly 20-person staff will stay with the company as part of the deal. (She declined to discuss the financial terms of the sale.) Eventually, FRC and Mercatus will find a new, larger location for the combined firms, but for now they will each retain their own separate headquarters, less than a mile apart.

"We're really very excited. We're going to keep our brand, we're going to keep our relationships and we're going to keep our people," Wetherbee told MFWire, adding that, in previous deals, FRC had just been "along for the ride." "This time they're buying FRC for FRC."

The only major change Wetherbee anticipates is one of leadership; she confirmed that FRC is still on the hunt for a permanent CEO. (Former FRC president Michael Evans left to join FRC founder Neil Bathon's new venture, FUSE Research Network, in September [see MFWire, September 15, 2008].)

Wetherbee is optimistic about the prospects for the two firms' combined efforts.

"We complement each other," Wetherbee said, pointing to FRC's expertise in the mutual fund business and Mercatus' strategic financial services consulting. "We will remain two different brands."

Citi acquired FRC last year as part of its purchase of Bisys Fund Services (see MFWire, June 1, 2007). Watch for Citi to sell more assets as it feels the pain of its still-falling stock price. 

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