Russell Investments' new private equity owners are expected to focus on restarting Russell Investments' growth engine, which has sputtered during two years of sales discussions.
Boston-based TA Associates announced Oct. 8 it would buy Russell's money management and consulting businesses for $1.15 billion from the London Stock Exchange Group PLC, with Reverence Capital buying a “significant minority stake” that sources pegged as high as 33%.
Until recently, the auction had been dominated by Chinese bidders, most notably CITIC Group, which reportedly had been considering a $1.8 billion offer for Seattle-based Russell before the sharp sell-off on China's stock market undermined its lead bidder status.
That opened the door for TA and Reverence. Sweeping changes are not expected, sources add. And Russell's current management team is expected to remain intact.
“Russell will continue to be based in Seattle. We are keeping the brand ... Russell has a very strong brand/ investment reputation,” said Milton R. Berlinski, co-founder, managing partner of Reverence Capital, in an interview. Executives with TA Associates declined to comment, including what fund invested in Russell.
Uncertainty about Russell Investments' future has not been good for business, sources close to the matter say. Russell Investments' assets under management fell 5% to $266 billion for the year ended June 30, according to a LSEG financial update. LSEG said it would buy the firm in June 2014, attracted by its index business that manages benchmark equity gauges including the Russell 2000 index.
Mr. Berlinski declined to comment on the sales process or any other detail related to the transaction.