American Express Co. will spin off its American Express Financial Advisors unit, which includes the firm's American Express Asset Management institutional business, said David Kanihan, AEFA spokesman. He said AEFA will become a separate public company and will remain based in Minneapolis. Management will remain the same, and Threadneedle Investments, the international investment platform that American Express acquired in 2003, will remain part of AEFA. James Cracchiolo will remain chairman and CEO of AEFA.
As an independent firm, AEFA won't have to compete against other American Express groups for capital or management resources and will be able to react more quickly to market opportunities, said Judy Tenzer, American Express spokeswoman. Officials for the company hope to complete the spinoff in the third quarter, subject to regulatory and board approval, Ms. Tenzer said.
Mr. Kanihan said that when the spinoff is complete, management will determine the "optimal structure," adding that there are "no immediate plans" for layoffs.
AEFA has $412 billion in total assets under management. American Express is not releasing the net worth of the entity that will be spun off.