Merrill Lynch Investment Managers (MLIM) is to sell off its Los Angeles business to its executives and will relocate the remaining operations and staff to London or Princeton, New Jersey.
George Davis, lead portfolio manager in LA, is leading the management buyout and has signed a letter of intent to buy the business for an undisclosed amount. Davis will be taking the firm's $3.2bn US equities business with him, and according to a source at MLIM, the deal is expected to be finalised in September.
MLIM's decision to sell off the LA business follows after the departure of its lead international equity managers Sarah Ketterer, Harry Hartford and James Doyle. The three resigned last month to form their own company.
The source also said that 44 of the LA unit's staff is expected to leave with Davis. The rest will either be laid off or transferred to London and Princeton. The source added that whilst most of the international equity team in LA had left with Ketterer, Hartford and Doyle, the remaining staff would be transferred to London.
The LA unit's fixed income business will move to Princeton, as will some of its staff. The rest will be released. The source said that MLIM would retain its LA based marketing team.
MLIM bought the LA unit, formerly known as Hotchkis & Wiley, in 1996. Ketterer, Hartford and Doyle left MLIM, according to reports, as they wanted a direct equity stake in their own business.
After leaving MLIM, the trio set up their own firm, Causeway Capital Management. Following their departure, MLIM handed their responsibilities to the London based team led by James Macmillan.
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