A publicly traded multinational's asset management team is still working through the integration of their freshly-closed U.S. acquisition even as their chief commits to a new key hub for the fund firm. And stay tuned for more strategic moves

Shawn K. Lytle Macquarie Group / Macquarie Investment Management / Delaware Funds U.S. Country Head / Global Head / President

"We are doing this acquisition and this integration from a position of strength," Shawn Lytle, global head of Macquarie Investment Management [profile] (MIM), tells MFWire. "We don't feel like we need to rush decisions that are going to impact clients."

On April 30, Macquarie Asset Management (MAM, of which Philadelphia-based MIM is a piece) closed on a pair of deals, simultaneously buying Overland Park, Kansas-based Waddell & Reed Financial and selling Waddell's wealth management business to LPL Financial Holdings, Inc.. Those deals brought Waddell's asset management business, Ivy Investments, to MIM and boosted MIM's partnership with a key distribution ally, LPL. Ivy brings $76 billion in AUM, boosting MIM to "well over $300 million," says Lytle, who also serves as president of MIM's Delaware Funds and head of the Americas for Sydney-based Macquarie Group. (That AUM is about evenly split between institutional and fund assets, Lytle notes.)

"The Waddell & Reed acquisition has been part of our overarching strategy and ensuring our position as what I'd call a diversified scale player," Lytle says.

"With this transaction, the Delaware family of funds becomes a top-20 active mutual fund family in the U.S," Lytle adds. "That was very important to me and to our firm in terms of our overarching strategic plan."

Personnel integration is one still-in-process piece of the Macquarie-Waddell deals. Waddell had more than 1,100 staff between its asset management business and its wealth management home office team (not counting all the advisors in the field, more than 90 percent of whom are staying on with LPL). On February 26, Waddell revealed (via a public WARN filing) that 219 employees would be laid off. And some Waddell & Reed staff moved over to LPL with that deal, too.

"We have made some significant decisions with regards to distribution staff and some support staff," Lytle says. "There are still many significant decisions to be taken with regard to the operating platform and some other pieces of the Waddell & Reed asset management business."

"The majority of the staff at Waddell & Reed are still with us," Lytle adds.

Lytle points to Ivy's "strong investment capabilities ... and investment talent" as one of the biggest reasons behind the pair of deals. The MIM team has revealed that on July 1 the Ivy Funds will rebrand as the Delaware Ivy Funds. (Lytle clarifies that MIM "continues to be fully committed" to the Delaware brand and that the current Delaware Funds will remain the Delaware Funds.)

Yet beyond the branding update, Lytle confirms that the MIM team has not yet made decisions in terms of investment capabilities integration, fund mergers, and the like.

"We are in the process of doing that. Before closing, we focused the majority of our integration efforts and planning on all of the non-investment areas of the firm," Lytle says. "We've been getting to know and doing much more deep due diligence on all of the investment capabilities on the Ivy side. We are excited about a number of new capabilities."

"We're trying to love all our portfolio managers and all our capabilities at this point," Lytle adds. "We are going to take our time. We are trying to be very thoughtful about how we develop a broader lineup of mutual funds that we offer clients."

Yet as the MIM team figures out the staffing and investment integrations, Lytle is making a geographic commitment.

"We are maintaining the Ivy Investments team in Kansas City, and we want to ensure that the cultural fabric of the Ivy Investments team and their investment process stays in place," Lytle says. "We'll continue to have a strong presence in Kansas City."

Another key reason behind the deals, Lytle says, is the expanded partnership with LPL, a giant independent B-D, and the opportunity for deeper relationships with the more than 1,000 former Waddell & Reed advisors. MIM is now part of LPL's Premier Partners, and the fund firm will now be the number two firm by assets on LPL's platform, Lytle notes.

"LPL has been a great partner with us through this whole process," Lytle says.

Looking ahead, watch for Lytle and his team to continue to grow their offerings, perhaps through further M&A.

"We will continue to look at adding new investment capabilities in areas which we believe can distinguish themselves for active management," Lytle says, noting that "key strategic initiatives" include bringing some of Macquarie's alternative investment offerings (including private equity, infrastructure, and real assets) to more wholesale, i.e. wealth management, clients in the U.S. and overseas. "It's about focusing on the things that you can be greater at and differentiate yourself on. We don't want to be everything to everyone."

Lytle also puts the Waddell & Reed acquisition in the context of the ongoing COVID-19 pandemic, noting that the MIM team is "still all-remote."

"I'm so proud of the team," Lytle says. "We were able to do this deal 100-percent remote from start to finish." 

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