TA Associates, Reverence Capital Close on $1.15B Russell Investments Acquisition

Jun 2 2016 | 8:15pm ET

Global private equity investor TA Associates, in tandem with Reverence Capital Partners,  has closed on its acquisition of the Russell Investments asset management unit of Frank Russell Company from the London Stock Exchange Group.

The acquisition was originally announced in October 2015 and closed on June 1, according to the company, with a valuation of $1.15 billion. The consideration includes four equal annual installments of $150 million that will start in December 2017.

Reverence Capital made a significant minority investment as part of the acquisition, while Russell Investments’ management reportedly also invested alongside TA and Reverence to acquire a meaningful equity stake in the business. 

The index portion of Russell will be separated from the asset management side in the first quarter of next year

"We are very pleased to complete the acquisition of Russell Investments and, together with Reverence Capital, begin our new relationship with this established and highly respected market leader,” said Todd Crockett, a managing director at TA Associates. 

“Russell Investments is excited to move forward with TA Associates and Reverence Capital, both of which have extensive experience investing in the asset management industry,” said Len Brennan, CEO of Russell Investments. “We see tremendous opportunities ahead as investors continue to shift toward a focus on achieving outcomes, and in turn look to Russell Investments to offer our multi-asset capabilities and solutions. 

“Management has demonstrated its commitment to the business by investing alongside TA Associates and Reverence Capital, further aligning Russell Investments with its long-standing clients,” he added. 

Upon the closing of the transaction, Crockett, Brennan, Reverence Capital managing partner Milton Berlinski, and TA Associates managing director Roger Kafker joined the Russell Investments board of directors.

The London Stock Exchange Group put the asset management side of the Russell business up for sale in early 2015 in a broad bidding process. At least ten firms responded, including Towers Watson, China’s Shanda Games and CITIC Group. Discussions with CITIC reportedly reached a fairly advanced stage, but were torpedoed by the meltdown in Chinese stock market, thus opening the door again to private equity bidders. 

TA Associates is one of the largest private equity firms in the world. It has invested in more than 460 companies, including 18 investments in the asset management space, and raised more than $24 billion in capital. 

Seattle-based Russell Investments was founded in 1938 and has approximately $247 billion in assets under management and is one of the few firms to offer actively managed multi-asset portfolios and services that include advice, investments and implementation. 

Founded in 2013 by Berlinski, Peter Aberg and Alexander Chulack, Reverence Capital Partners is a private investment firm focused on investing in leading financial services companies. The firm’s partners bring over 90 years of experience across a wide range of financial services sectors, including asset management, banks and specialty finance, capital markets, financial technology and insurance.

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