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LSE Deals Russell Investments for $1.15 Billion

The bidding is apparently over, and private equity firm TA Associates has agreed to acquire the Russell Investments asset management businesses from the London Stock Exchange Group for $1.15 billion in cash.

As part of the deal, Reverence Capital Partners will team up with TA Associates and make a “significant minority investment” in Russell Investments, which has about $266 billion in assets under management.

Under the terms of the deal, the London Stock Exchange Group will receive $1 billion in cash when the deal is completed and the remaining $150 million in four annual installments beginning on Dec. 31, 2017, according to The New York Times. The stock exchange operator expects to receive net proceeds after-tax and other liabilities of about $920 million. Published reports had anticipated a price tag of $1.5 billion.

The London Stock Exchange Group expects the firm’s index business to be completely separated from Russell Investments in the first quarter ahead of the sale. Last year, the stock exchange operator bought Russell Investments for $2.7 billion. In February, the company put the remaining investment management arm of Russell Investments up for sale to focus on increasing the size of its index business.

“Russell Investments will maintain its operational independence, and TA Associates and Reverence Capital will provide us with strong financial backing, new strategic insights, and a commitment to help us continue to deliver innovative investment solutions to our global client base,” Len Brennan, the Russell Investments president and chief executive, said in a news release.



Related: Frank Russell Acquired by LSE




Citing a person familiar with the deal, the Seattle Times reports that there will be no layoffs as a result of the acquisition. Additionally, the paper quoted Milton Berlinski, Reverence Capital’s managing partner, as saying there was “absolutely no intention of moving Russell out of Seattle.”

The deal is subject to regulatory approval and is expected to be completed in the first half of 2016.

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