Twitter icon Email alerts icon Latest News RSS icon Magazine icon Stay connected:

View the article online at http://citywire.co.uk/wealth-manager/article/a735544

Legal & General buys US investment firm for $50.4m

by Danielle Levy on Feb 21, 2014 at 07:45

Legal & General buys US investment firm for $50.4m

Legal & General is to buy US-based Global Index Advisors (GIA), giving the UK group a stronger foothold in the US pension market.

GIA is an Atlanta-based investment adviser that focuses on target date funds and is in the top five of target date providers in the US. The acquisition, by the group's subsidiary Legal & General Investment Management America (LGIMA), is for a maximum consideration of $50.4 million and expected to complete by mid-2014, subject to shareholder approval.

The initial consideration is $30.75 million, with deferred consideration of $1.5 million payable over the period of two years from the date of completion and further payments of up to a maximum of $18.15 million payable over three years from the date of completion, subject to performance and other conditions being met including additional assets.

The maximum cash consideration of $50.4 million will be funded from surplus capital held within thegGroup. The acquisition is expected to be earnings accretive for Legal & General in its first year and deliver a return above the group's weighted average cost of capital.

The acquisition would push LGIMA's assets to over $50 billion, providing the broader group with scale and distribution in the $6 trillion US defined contribution market, where target date fund assets are forecast to grow substantially by 2017. The deal will also allow the UK business Legal & General Investment Management to grow assets in the defined contribution (DC) market in the UK and US.

Legal & General said international expansion of asset management was one of its five key themes for growth.

Mark Zinkula, chief executive of Legal & General Investment Management, said: 'International expansion and the DC market are two extremely important drivers of future growth for LGIM, and the acquisition of Global Index Advisors today will allow us to accelerate our expansion in the US DC market.

Wadham Downing, group M&A director at Legal & General, added: 'We are delighted to announce our first US acquisition and our first in the asset management theme. GIA brings a new dimension to LGIMA and our US DC proposition. With today's announcement on GIA, we have now agreed five bolt-on acquisitions in the last 12 months.'

leave a comment

Please sign in here or register here to comment. It is free to register and only takes a minute or two.

News sponsored by:

Sponsored Video: Bringing it all back home


As the UK coalition government strives to rebalance the national economy, so called 'reshoring' looks set to play an increasingly important role in economic recovery.

Today's top headlines

Investing for income in a changing environment


With talk on interest rates on the horizon, our latest roundtable debate covers income investing against a changing backdrop

More about this:

Archive

On the road

Click here to find out more from the Audience Development team.

Read more...

Arbuthnot to sell structured products business

by Dylan Lobo on Jul 22, 2014 at 08:05

Sorry, this link is not
quite ready yet