Froley Revy to be sold to executives

Senior executives of Froley Revy Investment Co., a Los Angeles-based money manager that specializes in “convertible” securities, will buy the firm back from First Republic Bank of San Francisco, the two companies said Monday.

Froley Revy has suffered client defections in recent years that cut its assets under management to $2.7 billion on March 31 from $4.4 billion at the end of 2004. What’s more, the firm was notified in the first quarter that clients accounting for half of its 2006 investment fees intended to pull out their money, after First Republic agreed to be acquired by Merrill Lynch & Co.

First Republic bought Froley Revy in 2002 as part of the bank’s diversification into money management.

The financial terms of Froley Revy’s buyout by its executives weren’t disclosed.

The asset manager specializes in convertible bonds and preferred stocks -- fixed-income instruments that are exchangeable into common stock.

The firm was founded in 1975. Its clients include pension funds, mutual funds and individuals.