Macquarie to Acquire $12 Billion Asset Manager From Foresters

Macquarie Group Ltd.’s investing division agreed to buy a US business with $12.3 billion in assets from Foresters Financial, which is seeking to focus on life insurance.

Source: Bloomberg | Published on April 10, 2019

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Foresters is also selling its US broker-dealer including 40 branch offices to Cetera Financial Group, the Toronto-based company said Tuesday in a statement. Foresters said the transactions are expected to be completed by year-end. Terms weren’t disclosed, and Cetera will be adding about 500 financial advisers.

Macquarie Investment Management, which oversaw $234.5 billion including the Delaware Funds at the end of 2018, will gain the First Investors mutual funds business. The money manager owned by Sydney-based Macquarie Group will also oversee part of the Foresters general account, the investments that back policyholder funds. It is among firms such as Goldman Sachs Group Inc. and BlackRock Inc. increasingly courting insurers as clientele.

“It shows our commitment to continuing to build market share in the US,” Shawn Lytle, global head of Macquarie Investment Management, said in an interview. He said he’s looking to expand existing funds as well as make acquisitions, and that he’s boosting active management in equities and fixed income. “This helps continue to position us better in terms of market share.”

The asset-management industry is reshaping itself with deals, including Massachusetts Mutual Life Insurance Co.’s agreement last year to sell OppenheimerFunds to Invesco Ltd. Rival insurer MetLife Inc. added $37 billion in assets when it bought Logan Circle Partners in 2017.

Cetera is expanding after selling a stake to private equity firm Genstar Capital last year for $1.7 billion, people familiar with the matter told Bloomberg in July. Cetera will keep a distribution relationship with Foresters, according to the press release.

“We’re a different type of insurance company, we exist for our policyholders,” Foresters chief executive officer Jim Boyle said in an interview. The company is a so-called fraternal insurer, which means it distributes profit back to its members, or policyholders. “What this transaction does for us is it allows us to be laser-focused on our core mission.”