Deal Of The Year is awarded to the M&A deal of 2011 that has most changed the landscape of the fund industry.
Management Buyout Of Neuberger Berman Stake
Neuberger Berman management reached an agreement to buy out the remaining shares of the firm owned by Lehman Brothers. Management will pay about $1.5 billion for the 41% stake Lehman still owned in the $193 billion firm. The transaction will make the firm 100% employee owned so that it will not have to consult with Lehman’s trustees in making future decisions. It was the largest deal by assets under management in 2011 and leaves the fate of the firm entirely in the hands of management. Neuberger Berman won FII’s Deal Of The Year in 2009, when senior management snatched a controlling interest in the firm from under the noses of private equity firms Bain Capital and Hellman & Friedman.
CIBC’s Acquisition Of American Century Investments Stake
Canadian Imperial Bank of Commerce purchased a stake in American Century Investments from JPMorgan Chase in July, paying $848 million for a 41% stake in the firm. American Century had $112 billion in assets at the time of the deal. CIBC will get a 10% voting stake and two seats on the board of directors. The deal will help CIBC broaden its investment lineup and reach potential clients in the U.S. American Century will gain a distribution partner with a large footprint in Canada and other parts of the globe as it seeks to expand internationally. It was the second largest deal by assets under management in 2011.
Touchstone Investments Acquisition Of Old Mutual’s Retail Funds
Touchstone Investments’ acquisition of 17 of Old Mutual Asset Management’s U.S. retail funds boosts the firm’s assets to $10 billion from about $8 billion. The deal, the terms of which were undisclosed, was announced in October and is expected to close in the second quarter, helping expand Touchstone’s offerings in alternatives, international and large-cap equity funds. Subadvisors such as Barrow, Hanley, Mehwinney and Strauss, Dwight Asset Management and Thompson, Siegel & Walmsley will be added to Touchstone’s subadvisor roster. Many of the funds will be rebranded under the Touchstone name, although no final decisions have been made as to which ones will be rebranded. While it was a small deal in terms of assets transacted, it represents a retreat of a prominent global brand name from the U.S. retail fund business.