For the first time in nine years, Macquarie Group
is buying a U.S. mutual fund business with billions in assets.
Today Shawn Lytle
, who rose to global head of Macquarie Investment Management
in January, confirms
that the Philadelphia-based asset manager has agreed to acquire the First Investors
U.S. mutual fund business from a Canadian insurance giant, Foresters Financial
. The 25 First Investors Funds have about $12.3 billion in AUM (as of March 31), while MIM has $234.5 billion (as of December 31) worldwide, including its Delaware mutual fund business here in the U.S. Watch for Lytle to keeping hunting for more deals.
The deal, pricing and terms of which were not disclosed, is expected to close by early Q4. MIM did not work with an investment bank, Lytle confirms. The plan is to merge some First Investors funds into existing Delaware funds, while the others will be rebranded and become part of the Delaware family.
"This is an asset purchase. We will be bringing over the assets in the fund family," Lytle says. "We're not going to be bringing over much staff."
Lytle, who also serves as president of MIM's Delaware Funds and as U.S. country head for Macquarie Group (which is based in Australia), tells MFWire
that the Foresters deal is Macquarie's "first significant mutual fund acquisition since the Delaware acquisition nine years ago."
"This is a very good fit for the Delaware funds and for Macquarie," Lytle says. "The First Investors fund family is very complementary to the Delaware Funds. It will give us more size and scale in some funds and more marketshare, as well as some new funds we don't have."
Foresters acquired the First Investors fund business in 2011 as part of a broader U.S. acquisition.
"In seeking a firm to acquire and manage our mutual fund assets for US investors, Macquarie Investment Management stood out as a leader that would be able to support our clients with its global platform and its commitment to investment excellence," states Jim Boyle
, president and CEO of Foresters Financial. "The Delaware Funds by Macquarie stand for high conviction, long-term strategies, and we are confident we've found the right partner as we exit this area of our business."
The Foresters deal also includes a distribution carrot for MIM. In a separate deal, also unveiled
today, indie B-D network Cetera
has agreed to buy Foresters's U.S. B-D and advisory business, which supports about 500 independent FAs.
"It will expand our distribution opportunities," Lytle says. "It will help us to have a stronger relationship with Cetera going forward."
Looking ahead, Lytle confirms that he and his team are still looking for more deals, both for investment management and distribution opportunities.
"We are firmly committed to asset management and continuing to expand the distinct, active investment capabilities that we can offer to clients," Lytle says. "We continue to see a bifurcation in the industry, between those mutual fund families that are growing in the U.S. and those mutual fund families that are not."
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