COLUMBUS, Ohio — Nationwide Mutual Insurance and subsidiary Nationwide Financial Services reached agreement on "key terms" for Nationwide Financial's purchase of the Philadelphia-based mutual fund operations of NWD Investment Management, another Nationwide Mutual subsidiary.
Pending negotiations, Nationwide Financial will pay $200 million in cash plus "an amount equal to the tangible shareholders' equity on the balance sheet at closing," according to a Nationwide news release.
The deal is expected to close sometime during the second quarter of 2007.
The purchase won't include the institutional asset management businesses — Morley Financial Services, NorthPointe Capital, Riverview Alternative Investment Advisors and Nationwide Separate Accounts — within NWD, which as recently as November had been known as GartmNorthPointe Capitalices, NorthPointe Capital, Riverview Alternative Investment Advisors and Nationwide Separate Accounts — within NWD, which as recently as November had been known as Gartmore Global Investments.
Nationwide Mutual is reviewing its strategic options for the institutional businesses.
The purchase of NWD's retail operations would bring Nationwide Financial roughly $27 billion in assets under management, including $25 billion in mutual fund assets.
Approximately $13 billion of the mutual fund assets are subadvised by third parties, and Nationwide Financial will look to move "all of NWD Investment Management's retained assets to a subadvised platform, maintaining as much continuity with key portfolio managers as possible."
Asked what that implies for the portfolio management teams Nationwide Financial will acquire, John Grady, the interim head of NWD Investment Management who was brought in recently by Nationwide Mutual, said he can't speak at this point for Nationwide Financial.
In recent months, sources familiar with the group have said Nationwide Financial will look to focus on distribution, and both the retail and institutional manufacturing capabilities within NWD are likely to find new homes or ownership structures in the near future.