Exclusive: CIBC, buyout firms circle Russell Investments - sources

Tue Apr 22, 2014 5:17pm EDT
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By Greg Roumeliotis, Mike Stone and Euan Rocha

NEW YORK/TORONTO (Reuters) - Canadian Imperial Bank of Commerce (CM.TO: Quote) (CIBC), the fifth largest bank in Canada, and two private equity consortia are exploring offers for global asset manager Russell Investments, according to several people familiar with the matter.

Private equity firms CVC Capital Partners Ltd and Silver Lake have teamed up to pursue Russell Investments, as have Warburg Pincus LLC and TPG Capital LP, the people said this week. They and CIBC are considering bids for all of the Russell Investments assets, they added.

Northwestern Mutual Life Insurance Co, which owns Russell Investments, is hoping to find a buyer for both the investment management and indexes businesses of Russell for as much as $3 billion, the people said.

Shortlisted parties have been tentatively asked to submit offers for Russell Investments by the end of the month, the people said. Some other bidders in the auction are only interested in some of the assets. MSCI Inc (MSCI.N: Quote), for example, is interested only in Russell's indexes business, some of the people said.

The sources asked not to be identified because the deliberations are confidential. Northwestern Mutual, CIBC, Warburg Pincus, TPG, CVC and Silver Lake declined to comment, while a MSCI spokeswoman did not respond to a request for comment.

Seattle-based Russell provides pension consulting, investment management, transition management services and indexes such as the Russell 1000 Global Index. It has more than $259 billion in assets under management, according to its website.

Reuters first reported in January that Milwaukee-based insurer Northwestern Mutual is discussing selling the Russell subsidiary because it has decided it is not a core part of its business.

For CIBC, an acquisition of Russell Investments would boost its asset management business and its global presence. The Toronto-based bank, like many of its Canadian peers, has stated that it plans to actively build scale in its asset management business via acquisitions.   Continued...

A sign is pictured outside a Canadian Imperial Bank of Commerce branch in Ottawa August 26, 2009. REUTERS/Chris Wattie