Federated Investors will acquire $17 billion in money market assets from SunTrust Bank’s money management subsidiary, RidgeWorth Capital Management.
Federated will make an upfront cash payment of up to $8.75 million when the deal closes, with additional contingent payments that could come to $30 million over the next five years, depending on the final level of assets acquired by Federated, said Meghan McAndrew, Federated spokeswoman.
After a strategic review of RidgeWorth, a holding company of money management boutiques, SunTrust decided to “retain RidgeWorth’s long-term asset management business,” according to a SunTrust news release.
For much of this year, investment bankers had reported that SunTrust was looking for potential buyers for RidgeWorth, with Henderson Group identified as the leading bidder. On June 18, both Henderson and SunTrust announced that talks had broken off.
The Federated-SunTrust agreement calls for the assets in nine RidgeWorth money market mutual funds to be moved to six similar-style Federated funds by the end of the year, pending client approvals.
The RidgeWorth funds are being managed by StableRiver Capital Management, RidgeWorth’s liquidity and short-term fixed income boutique. StableRiver’s latest ADV filing with the SEC pegged the company’s assets under management at $28.2 billion.
In an e-mail response to questions, SunTrust spokesman Mike McCoy said StableRiver will continue to manage non-liquidity funds.
David H. Eidson, RidgeWorth’s chairman and CEO, couldn’t immediately be reached for further comment.
