Hartford's Funds May No Longer Be On the Block
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Wednesday, September 28, 2011

Hartford's Funds May No Longer Be On the Block

It looks like the Hartford's [see profile] U.S. mutual fund business is staying put after all. Bloomberg's Cristina Alesci, Andrew Frye and Zachary Mider report that, according to unnamed sources, the insurer ended its talks to sell the business to private equity firm Clayton Dubilier & Rice in a leveraged buyout.

Bloomberg first reported in May that Hartford was shopping its mutual fund business, which is sub-advised by Wellington and by another unit of the Hartford [see, 5/12/2011].

Why did the deal fall through? The problem may have been on the buyer's side. Bloomberg notes that banks have cut back on LBO lending -- on Monday KKR co-founder Henry Kravis said that interest rates for LBO capital have jumped more than 200 basis points since April.

According to Bloomberg, Hartford's mutual fund business earned $27 million in the second quarter, from $175 million in revenue.

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