CIBC, buyout firms circle Russell Investments: sources
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[April 23, 2014]
By Greg Roumeliotis, Mike Stone and
NEW YORK / TORONTO (Reuters) — Canadian
Imperial Bank of Commerce <CM.TO> (CIBC), the fifth largest bank in
Canada, and two private equity consortia are exploring offers for
global asset manager Russell Investments, according to several
people familiar with the matter.
Private equity firms CVC Capital Partners Ltd and Silver Lake have
teamed up to pursue Russell Investments, as have Warburg Pincus LLC
and TPG Capital LP, the people said this week. They and CIBC are
considering bids for all of the Russell Investments assets, they
Northwestern Mutual Life Insurance Co, which owns Russell
Investments, is hoping to find a buyer for both the investment
management and indexes businesses of Russell for as much as $3
billion, the people said.
Shortlisted parties have been tentatively asked to submit offers for
Russell Investments by the end of the month, the people said. Some
other bidders in the auction are only interested in some of the
assets. MSCI Inc <MSCI.N>, for example, is interested only in
Russell's indexes business, some of the people said.
The sources asked not to be identified because the deliberations are
confidential. Northwestern Mutual, CIBC, Warburg Pincus, TPG, CVC
and Silver Lake declined to comment, while a MSCI spokeswoman did
not respond to a request for comment.
Seattle-based Russell provides pension consulting, investment
management, transition management services and indexes such as the
Russell 1000 Global Index. It has more than $259 billion in assets
under management, according to its website.
Reuters first reported in January that Milwaukee-based insurer
Northwestern Mutual is discussing selling the Russell subsidiary
because it has decided it is not a core part of its business.
For CIBC, an acquisition of Russell Investments would boost its
asset management business and its global presence. The Toronto-based
bank, like many of its Canadian peers, has stated that it plans to
actively build scale in its asset management business via
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CIBC faced a setback last year after losing out on a long-standing
lucrative deal with loyalty-program company Aimia Inc <AIM.TO> and
the latest industry data indicates that it has now ceded its spot as
Canada's largest credit card issuer to rival Toronto-Dominion Bank <TD.TO>,
which last year agreed to buy half of CIBC's Aeroplan credit card
Alternative asset manager Carlyle Group LP <CG.O> considered
acquiring Russell Investments earlier this year to expand its
product offerings, rather than as a buyout fund investment, people
familiar with the matter said earlier this year, but the Washington,
D.C.-based firm is no longer in the auction.
A Carlyle spokesman did not immediately respond to a request for
(Reporting by Greg Roumeliotis and Mike Stone in New York and Euan
Rocha in Toronto; editing by Bernard Orr)
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