Merrill Lynch is disbanding its Hotchkis & Wiley unit. George Davis, lead portfolio manager at the unit, today signed a letter of intent to buy out the Hotchkis & Wiley name and all the business of the U.S. equity deep value unit, which has $3.3 billion in assets under management. Mr. Davis will take about 45 people with him. Christine Walton, a Merrill Lynch spokeswoman, would not disclose terms. The deal is expected to close in the fall, Ms. Walton said. Mr. Davis could not be reached by press time.
To streamline institutional investment management in the U.S., Merrill Lynch will lay off about 40 people and will transfer management of the $3.3 billion in international equities to the global value team in London, said Frank Salerno, managing director and head of the U.S. institutional business. Lead international equity managers Sarah Kettering and Harry Hartford left in June to form Causeway Capital. One or two people will be retained from the Hotchkis & Wiley team and will move to London; the rest will be laid off.
Merrill Lynch will transfer management of $3.3 billion in fixed-income assets that had been managed by Hotchkis & Wiley to its existing domestic fixed-income team in Princeton, N.J., Mr. Salerno said. One or two Hotchkis & Wiley bond managers will relocate to New Jersey; The rest will be laid off.