DES MOINES, Iowa--(BUSINESS WIRE)--Principal Global Investors, LLC, a leading global asset manager and a member of the Principal Financial Group® (NYSE:PFG), today announced a definitive agreement to acquire a 74% stake in Origin Asset Management, LLP, (Origin), for approximately US $66 million based on current exchange rates (GBP £40.7 million). Origin is an established global equity specialist based in London.
“We are delighted to be entering into this partnership,” said Jim McCaughan, chief executive officer of Principal Global Investors. “Origin’s proven capabilities in managing global equities will be very attractive to our clients and advisors around the world.”
Origin was founded in 2005 by a respected team of investment managers in partnership with IPGL, a private holding company. The firm now has approximately US $3 billion1 in assets under management in Global and International equities. Additionally, Origin recently launched two new products: Global Smaller Company and Emerging Market Funds. Origin partners will retain a 26 percent stake in the business and will be reinvesting a substantial share of their consideration into funds managed by the firm. All passive investors in Origin, including IPGL, will sell their entire holdings to The Principal.
“We are excited to be teaming up with Principal Global Investors,” said Nigel Dutson, managing partner of Origin. “This strategic partnership will allow us to continue the development of our business around the world while maintaining our operating independence, distinctive investment process and organizational culture.” Through this transaction, Principal Global Investors will enhance its global equity capabilities and further strengthen its well-established multi-boutique model. Origin will benefit from access to The Principal’s global presence, product development expertise and best practice support infrastructure.
“Origin’s strong reputation and distinct investment expertise complements our existing product suite,” said McCaughan. “This partnership also increases our investment capabilities in emerging markets and in global small and mid-cap companies, where additional high-quality investment capacity is much sought after, but in relatively short supply.”
The transaction is expected to close in October 2011, pending regulatory approval. Excluding transaction and integration costs, Principal Financial Group estimates the acquisition will be EPS neutral in 2011 and slightly accretive in 2012. Fenchurch Advisory Partners advised The Principal on the transaction.
This is the third acquisition announced this year as part of Principal Financial Group’s 2011 capital deployment strategy. In addition to these acquisitions, The Principal’s Board of Directors in May renewed authorization to repurchase up to $250 million of the company's outstanding common stock.
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Forward looking and cautionary statements
This press release
contains forward-looking statements, including, without limitation,
statements as to operating earnings, net income available to common
stockholders, net cash flows, realized and unrealized gains and losses,
capital and liquidity positions, sales and earnings trends, and
management's beliefs, expectations, goals and opinions. The company does
not undertake to update or revise these statements, which are based on a
number of assumptions concerning future conditions that may ultimately
prove to be inaccurate. Future events and their effects on the company
may not be those anticipated, and actual results may differ materially
from the results anticipated in these forward-looking statements. The
risks, uncertainties and factors that could cause or contribute to such
material differences are discussed in the company's annual report on
Form 10-K for the year ended Dec. 31, 2010, and in the company’s
quarterly report on Form 10-Q for the quarter-ended March 31, 2011,
filed by the company with the Securities and Exchange Commission, as
updated or supplemented from time to time in subsequent filings. These
risks and uncertainties include, without limitation: adverse capital and
credit market conditions that may significantly affect the company’s
ability to meet liquidity needs, access to capital and cost of capital;
continued difficult conditions in the global capital markets and the
economy generally that may materially adversely affect the company’s
business and results of operations; the risk from acquiring new
businesses, which could result in the impairment of goodwill and/or
intangible assets recognized at the time of acquisition; impairment of
other financial institutions that could adversely affect the company;
investment risks which may diminish the value of the company’s invested
assets and the investment returns credited to customers, which could
reduce sales, revenues, assets under management and net income;
requirements to post collateral or make payments related to declines in
market value of specified assets may adversely affect company liquidity
and expose the company to counterparty credit risk; changes in laws,
regulations or accounting standards that may reduce company
profitability; fluctuations in foreign currency exchange rates that
could reduce company profitability; Principal Financial Group, Inc.’s
primary reliance, as a holding company, on dividends from its
subsidiaries to meet debt payment obligations and regulatory
restrictions on the ability of subsidiaries to pay such dividends;
competitive factors; volatility of financial markets; decrease in
ratings; interest rate changes; inability to attract and retain sales
representatives; international business risks; a pandemic, terrorist
attack or other catastrophic event; and default of the company’s
re-insurers.
About Principal Global Investors
Principal Global Investors
is a diversified asset management organization and a member of the
Principal Financial Group, with expertise in equities, fixed income and
real estate investments, as well as specialized overlay and advisory
services. Principal Global Investors manages $235.3 billion in assets2
primarily for retirement plans and other institutional clients. For more
information, visit www.principalglobal.com
About Origin
Origin Asset Management LLP is an independent
investment management company that has been in operation since May 2005.
Their investment team manages £2.0 billion3 (US $3.2 billion)
in equity portfolios on behalf of major institutional clients worldwide.
About the Principal Financial Group
The Principal Financial
Group® (The Principal®)4 is a
retirement and global asset management leader. The Principal offers
businesses, individuals and institutional clients a wide range of
financial products and services, including retirement, investment
services and insurance through its diverse family of financial services
companies. A member of the FORTUNE 500®, the Principal
Financial Group has $327.4 billion in assets under management5
and serves some 16.4 million customers worldwide from offices in Asia,
Australia, Europe, Latin America and the United States. Principal
Financial Group, Inc. is traded on the New York Stock Exchange under the
ticker symbol PFG. For more information, visit www.principal.com.
About IPGL
IPGL Limited is a group holding company, in which
Michael Spencer, Chairman of IPGL Limited, and Chief Executive of ICAP
plc, together with his wife and family trusts, are majority
shareholders. IPGL's holdings include ICAP plc, the world's largest
inter-dealer broker listed on the London Stock Exchange (Code:IAP) ;
City Index, a market leading provider of contracts for difference for
retail investors; Governance for Owners Group LLP, an investment manager
dedicated to long term shareholder value; and in AIS, the hedge fund
administrator headquartered in New Jersey. IPGL's holding in Origin was
made by its wholly owned subsidiary, Allerton Investments BV. For more
information, visit www.ipgl.co.uk.
1 As of April 1, 2011.
2 As of March 31, 2011.
3
As of April 1, 2011.
4 “The Principal Financial Group”
and “The Principal” are registered service marks of Principal Financial
Services, Inc., a member of the Principal Financial Group.
5
As of March 31, 2011.