Private equity firm TA Associates is to acquire Frank Russell Company’s asset management business, Russell Investments, from London Stock Exchange Group (LSEG) in a deal valued at USD1.15 billion.
As part of the deal, which is subject to the usual regulatory approvals and is expected to close in the first half of 2016, Reverence Capital Partners is making a ‘significant minority investment’ in Russell Investments.
“We are delighted to partner with such an established and highly respected market leader in the investment management industry,” says Todd Crockett, a Managing Director at TA Associates. “We believe that the breadth of Russell Investments’ investment and implementation operations, as well as its orientation to multi-asset and solutions investing, will continue to be a differentiator and driver of growth in the marketplace going forward.”
Milton Berlinski, Managing Partner of Reverence Capital, adds: “We are pleased to partner with TA Associates on the acquisition of Russell Investments, a pioneer and leader in global multi-asset investment solutions.”
Seattle-based Russell Investments, which provides investment services to both institutional and retail clients around the world, has USD266 billion of assets under management. The company also offers consulting services with USD2.4 trillion of assets under advisory.
“We are excited to work with the principals at TA Associates and Reverence Capital, firms we’ve been well acquainted with for many years,” says Len Brennan, President and CEO of Russell Investments. “TA Associates and Reverence Capital have extensive experience in asset management and we consider their decision to invest in Russell Investments a notable endorsement of our leading position in outcome-oriented solutions, one of the fastest growing segments in the asset management industry. Through their financial backing, strategic guidance and industry expertise, TA Associates and Reverence Capital will support Russell Investments’ growth and help us continue to deliver innovative investment solutions to our global client base.”
The terms of the deal will see LSEG receive USD1 billion on completion with the remaining USD150 million due to be paid in four annual instalments commencing on 31 December 2017.
Goodwin Procter and Broadhaven Capital Partners are acting as advisors to TA Associates and Reverence Capital, while Freshfields Bruckhaus Deringer, JP Morgan and Goldman Sachs are advising LSEG.