UK/EUROPE - American Express Financial Advisors has acquired Threadneedle Asset Management for £340m (US$570m/e488m) as the former eyes opportunities in Europe in light of pension reforms.
Threadneedle’s current owner, Zurich Financial Services, sold the firm to Amex in order to raise capital to prop up its struggling insurance businesses and secure a focus on core interest.
The acquisition is also seen as an attempt to take advantage of shifts in the European pensions and savings market. Threadneedle is the second largest retail investment fund manager in the UK and the ninth largest segregated pension fund manager, all by assets under management Threadneedle also operates in Germany and other European markets.
Amex said that it will retain the Threadneedle brand, along with the firm’s investment processes and its current management.As part of the deal, Threadneedle will continue to manage assets for Zurich for an initial eight-year period, subject to certain performance criteria.
The firm will also maintain its links with Zurich’s distribution networks, the tied financial advisors group, Zurich Advice Network, and the Zurich IFA Group.
The deal is subject to regulatory approval and both sides expect it to be completed by the end of the year.
Amex chairman and chief executive officer Jim Cracchiolo said that the acquisition would compliment Amex’s existing businesses, which are primarily focused on retail and private banking.
He said: “The decision to acquire Threadneedle is part of our overall strategy to expand our financial services business globally.”
The shortlist of potential buyers was also thought to include Deutsche Asset Management and Schroder Investment Management.
The Pensions and Lifetime Savings Association (PLSA) has announced it will shrink its board by more than one-third as part of a governance overhaul to make it "agile and more appropriate".
Smaller FTSE 350 defined benefit (DB) schemes were nearly 15 percentage points less well-funded than larger schemes in 2017, according to a Goldman Sachs Asset Management (GSAM) analysis.
The advent of collective pension systems could help the UK avoid demographic challenges which will make it "impossible" for society to help savers in retirement, experts say.