Pacific Life Insurance Co. agreed to buy Cadence Capital Management, adding $4 billion in assets under management and expanding into smart beta investing, which weighs metrics beyond market capitalization when picking stocks.
Cadence oversees money for wealthy clients, institutions and mutual funds, and offers strategies that bet on both gains and declines of securities, PacLife said in a statement that didn't disclose terms of the agreement.
The deal reunites PacLife with Cadence, which was part of the Pacific Investment Management Co. business that was acquired by Germany's Allianz SE in 2000. Boston-based Cadence, which subsequently became a separate company, will continue to operate as an independent investment adviser after the completion of the deal with PacLife's Pacific Asset Advisors LLC, known as PAAL.
“The strategic beta solutions that Cadence has developed will help enhance PAAL's ability to deliver to its clients distinct investment opportunities,” Andrew Oleksiw, PacLife's senior vice president of corporate development, said in the statement.
Rivals including Massachusetts Mutual Life Insurance Co. and Transamerica have also been pushing into smart beta, seeking to attract more customers. Cadence will help PAAL expand offerings of socially responsible investments, a category that can include companies committed to solutions for poverty or disease, according to the statement. Smart-beta providers can charge higher fees on the products than on index funds weighted by market capitalization.
PacLife was the original parent company of Cadence in 1988, according to the statement. PIMCO, which was established in 1971 by a group that included money manager William H. Gross, became a publicly traded company in 1994, before it became part of Munich-based Allianz.