TOLEDO, Ohio - Harbor Capital Advisors will continue managing Owens-Illinois' $3 billion in retirement plan assets even though Owens-Illinois Inc. is selling the money manager to Robeco Groep NV.
"The only change is the parent company," said James Williams, president of Harbor Capital Advisors and the Harbor Fund mutual fund family.
Robeco, Rotterdam, Netherlands, is paying up to $490 million for Harbor Capital, Toledo, subject to certain downward adjustments based on revenues from sales and redemptions of shares of the Harbor Fund when the deal closes in June.
Harbor Capital will continue to manage the $2.5 billion Owens-Illinois defined benefit plan in traditional separate accounts and the nearly $500 million 401(k) through 12 subadvised mutual funds, Mr. Williams said.
Mr. Williams will remain president of Harbor Capital and will retain his 65-person staff. Neither the company name nor its investment style will change
Harbor Capital will be "an important base for Robeco's activities in the United States," according to a statement from Robeco, which already owns Weiss, Peck & Greer, New York, with $20 billion under management.
In connection with the announcement about Harbor, Robeco executives said they intend to buy, build and joint venture their way into the ranks of the 15 biggest money managers in Europe. No details were provided.
Robeco executives think Harbor Capital's business model - using only subadvisers - "is an extremely promising concept which is becoming increasingly popular," said Pieter Korteweg, chairman of Robeco's executive committee, in the statement.
The deal is subject to regulatory approval and approval of the trustees and shareholders of the mutual fund. It is expected to close in June.
Owens-Illinois management decided to sell Harbor Capital because the company is focusing only on its core businesses in glass and plastics packaging, Joseph H. Lemieux, chairman and chief executive officer of Owens-Illinois, said in a statement. For their part, Harbor Capital executives would prefer a financial services company as a parent. "O-I is a great packaging company, but they're in a different industry than we are," Mr. Williams said.
Harbor was spun off from Owens-Illinois in 1983. In 1987, it began managing money for outside clients in mutual funds.
There are now 12 mutual funds in the Harbor Fund family run by 11 money management firms. The equity strategies offered are: growth, value, midcap growth, small-cap growth, international, global and international growth. Also offered are a bond fund, a short-duration fund, a money market fund and a capital appreciation fund.
Assets under management total $17 billion, of which $14 billion is from external clients and is invested in the 12 mutual funds in the Harbor family. About 80% of the external assets under management are for institutional clients, Mr. Williams said.
One manager per fund
Unlike a manager-of-managers approach, Harbor Capital chooses just one manager for each mutual fund, but can draw from the wider base of money managers used in the defined benefit plan if a manager change is needed.
Harbor Capital staffers are looking forward to tapping a European distribution channel through Robeco, Mr. Williams said. "Harbor Capital Advisors is not a big marketing machine. We never have been. Robeco will help us provide European investors with opportunities to invest in the United States. We want to get out ahead of the curve as Europe moves out of its traditional bank savings culture."
Mr. Williams believes the firm's story "resonates well with institutional investors. Our roots are in the O-I pension fund. We sit on the same side of the table as sponsors. We are selling to them as principals, not as agents, since our own pension money is invested in our strategies."