Cathay Financial Holding Co. will buy Conning Holdings Corp., a Hartford, Conn.-based money manager focused on insurance clients, from private equity firm Aquiline Capital Partners for up to US$240 million, the Taipei-based financial conglomerate announced Wednesday.
The deal is expected to close in the second half of 2015, subject to regulatory approvals in Taiwan, the U.S. and Europe.
The announcement comes just more than three years after Cathay and Conning announced they would set up a 50-50 joint venture in Hong Kong to serve institutional clients in the Asia-Pacific region, and roughly 5½ years after New York-based Aquiline acquired Conning from Swiss Reinsurance Co. for an undisclosed amount. Conning has about $92 billion in assets under management.
By removing uncertainties about an inevitable transition from private equity ownership, the move will provide a greater sense of stability for Conning, said Woody Bradford, Conning's president and CEO, in an interview Wednesday.
Meanwhile, Cathay's commitment to the firm will enhance its global growth prospects, Mr. Bradford added.
Mr. Bradford said insurance clients — facing a low-interest-rate environment that could be poised to enter a new stage — have been grappling with the need to diversify their investments away from core fixed income by adding strategies as simple as equities and as complex as alternatives.
Conning's challenge has been to broaden its investment capabilities to meet the expanding needs of its clients, and Cathay has committed to back the firm, whether by providing capital to seed new products or backing opportunities such as liftouts or acquisitions, Mr. Bradford said.
With the close of the deal, Conning will become a wholly owned subsidiary of Cathay, but Mr. Bradford said a long-term incentive plan to attract, retain and motivate the firm's professionals will be announced later.