Henderson leads pack to acquire RidgeWorth from SunTrust

Henderson Group PLC has emerged as the leading bidder for the bulk of SunTrust Bank's money management arm, Atlanta-based RidgeWorth Capital Management Inc., according to bankers and industry executives, who declined to be named.

Roughly a year after acquiring London-based New Star Asset Management, Henderson Group, likewise based in London, appears to have the edge over other bidders, including AllianceBernstein LP, for the higher margin pieces of the business.

RidgeWorth Capital is a holding company with eight underlying money management boutiques that oversee combined client assets of roughly $65 billion. Sources say Henderson Group is interested in the group's roughly $36 billion of non-money market assets in a variety of institutional and retail fixed-income and equity strategies.

If completed, the deal would give Henderson Group, the holding company of Henderson Global Investors Ltd., the jewel in Ridgeworth's crown, Seix Investment Advisors LLC, an Upper Saddle River, N.J.-based fixed-income boutique with $24.6 billion in client assets, as well as a handful of smaller equity boutiques scattered across the country.

In order of client assets, those boutiques are Silvant Capital Management LLC, an Atlanta-based growth equity shop with $3.8 billion in assets; Ceredex Value Advisors LLC, an Orlando, Fla.-based value equity manager with $3.1 billion; Zevenbergen Capital Investments LLC, a Seattle-based growth equity firm with $2.2 billion; Certium Asset Management LLC, an Atlanta-based quant boutique with $1.8 billion; IronOak Advisors LLC, a Richmond, Va.-based core equity manager with $1 billion; and Alpha Equity Management LLC, a Hartford, Conn.-based 130/30 manager with $165 million.

Henderson Group isn't likely to acquire the group's Atlanta-based stable value and money market boutique, StableRiver Capital Management LLC, which has more than $28.2 billion in client assets, bankers say.

Bankers believe the price tag for the non-money market business will come in between $300 million and $400 million.

Andrew Formica, CEO of publicly traded Henderson Group, didn't immediately respond to phone calls and e-mails seeking comment. Laura Cook, a London-based spokeswoman, said the company doesn't comment on market speculation. David H. Eidson, the chairman and CEO of RidgeWorth Capital, didn't immediately respond to phone calls seeking comment. AllianceBernstein spokesman John Meyers, asked about reports that his firm has been involved in bidding for RidgeWorth, likewise declined to comment on speculation.

In Henderson's latest annual report, released March 29, Mr. Formica cited his company's April 2009 acquisition of New Star Asset Management, which raised its profile in the U.K. retail market, as an example of Henderson Group's ability to “take advantage of opportunities presented by market disruption to benefit our shareholders.”

He went on to say that his management team remains “watchful for opportunities to expand our business faster internationally if other partnership situations present themselves.”

In contrast to New Star, Seix is mostly an institutional manager, with public and private pension funds, Taft-Hartley plans and foundations and endowments accounting for more than 70% of its clients, according to Marietta, Ga.-based data provider eVestmentAlliance. Institutional mutual funds account for another 23% of assets, with wrap accounts adding another 4.5%.

Still, the RidgeWorth boutiques would add some solid U.S. retail performance to Henderson Group’s lineup as well. On March 24, RidgeWorth garnered two of the four “group awards” given at the 2010 Lipper Fund Awards ceremony for “small companies” with combined assets under management of less than $34.5 billion — the best “overall” small fund family, in terms of performance for the 3-, 5- and 10-year period through Dec. 31, 2009, and the best “mixed asset” award.