* BNP IP deputy CEO says some Fortis units may stand alone
* Plans major programme of fund mergers by end-summer
* To cut costs in back office, middle office
By Claire Milhench
MONACO, June 24 (Reuters) - BNP Paribas will split up Fortis Investments, leaving some areas to stand alone while allocating others to parts of the group's existing fund arm, said the deputy CEO of BNP Paribas Investment Partners.
Philippe Marchessaux said at the Fund Forum industry conference that BNP Paribas IP wanted to slash the number of funds offered to clients by the combined group, while focusing at first on cost cuts outside of the fund management teams.
"In the first stage we will integrate it as a whole, but then we will look within Fortis Investments to see what can be aggregated to, for example, BNPP AM or Fischer Francis Trees & Watts, or can be left to stand alone," he said.
BNP IP comprises 20 divisions in a multi-boutique structure that includes BNP Paribas Asset Management and global fixed income specialist Fischer Francis Trees & Watts (FFTW).
A spokeswoman said Marchessaux's comments meant teams from Fortis Investments -- whose CEO resigned early in June to be replaced by the BNP IP vice chairman Guy de Froment -- might be used to add to those 20 boutique divisions.
BNP Paribas acquired Fortis Investments as part of a rescue deal that saw the Belgian state transfer 54.55 percent of the shares in Fortis Bank to its French peer.
Marchessaux's comments come as the industry wrestles to manage costs and embarks on a wave of consolidation in the wake of the financial crisis.
JOBS THREAT?
Marchessaux told Reuters he expected cost savings in the back and middle offices, and a move to a single IT system.
"We also have a lot of work to do in terms of mutual fund mergers," he said.
He could not say how many individual funds were in the combined group, but said BNPP AM's flagship range Parvest had about 90 sub-funds, and Fortis about 200. Too many, he said.
"300 compartments (sub-funds) is too much, but how many we will have at the end of the day, I don't know."
He would not be drawn directly on the prospects for job losses among fund managers but said the aim was to be in a position to tell clients who would be managing their portfolios by the end of the summer.
"As far as the portfolio management team is concerned, we will announce some competencies very rapidly," he said.
The addition of Fortis Investments to the complex BNP Paribas structure will bring overlaps but Marchessaux said that in some areas both teams might be kept if they served different client segments or followed different investment styles.
He said it was too early to say where the head office would be. Fortis was famously double-headed, with its Belgian and Dutch bases, and Marchessaux noted the group would be able to leverage four "domestic" markets -- Belgium, Luxembourg, the Netherlands and France.
In particular, Marchessaux said BNP IP would look to accelerate the growth of its institutional client base.
He said the acquisition of Fortis Investments added presence in the U.S., where BNP's footprint was limited to FFTW and multi-manager FundQuest, and in Asia, where Fortis has a joint venture in China and a presence in Indonesia.
"In Europe they have a presence in the Nordics, where we have no presence, and in the Netherlands we will look to continue to serve the ABN Amro retail client base," he added. (Editing by Will Waterman)