April 2, 2013 / 6:21 PM / in 5 years

UnionBanCal to sell mutual fund business -sources

* Deal announcement expected this week -sources

* Firm decided funds were non-core -source

By Jessica Toonkel

NEW YORK, April 2 (Reuters) - San Francisco-based UnionBanCal Corp is selling its mutual fund business, three sources told Reuters on Tuesday.

The firm is expected to announce the sale of its HighMark Funds in the next few days, two of the sources said.

UnionBanCal, which also owns Union Bank, is selling its mutual funds because it is not core to its business, said one of the sources familiar with the situation, who wanted to remain anonymous because he is not allowed to speak to the press.

The firm is expected to sell its five money market funds to one buyer and the rest of its mutual fund business to another buyer, said one of the sources. Highmark’s 24 funds have $8 billion in assets, according to Lipper. Five of those funds are money market funds and have $4.2 billion in assets.

It could not be determined who the buyers were or how much UnionBancal is getting for the sales.

A UnionBancal official was not immediately available to comment, a spokeswoman said.

UnionBancal, which had $97 billion in assets at December 31, 2012, is a subsidiary of Mitsubishi UFJ Financial Group Inc .

The firm joins a number of U.S. financial institutions that are shedding their asset management arms to focus on their core banking businesses.

Atlanta-based SunTrust Banks Inc. is in talks to sell its Ridgeworth Asset Management and is also expected to announce a deal shortly.

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