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Money Management

Macquarie to acquire $12.3 billion in mutual fund assets from Foresters

Macqaurie Investment Management will acquire $12.3 billion in assets under management from the mutual fund business of Toronto-based Foresters Financial, the company announced Tuesday.

Under the deal, Macquarie will buy Foresters' First Investors mutual funds business and the acquired assets will become part of its Delaware Funds product lineup, a news release said.

Foresters' investment professionals will not move to Macquarie under the agreement, as Macquarie is only acquiring the mutual fund assets from Foresters, a spokeswoman for Macquarie said.

Philadelphia-based Macquarie Investment Management had about $234.5 billion in institutional and retail assets under management as of Dec. 31 and is a unit of Sydney-based Macquarie Group.

The terms of the deal were not publicly disclosed. The transaction is expected to close in the fourth quarter of this year, according to the news release.

"The First Investors funds business aligns with our mission to provide clients with investment capabilities across multiple strategies," Shawn Lytle, global head of Macquarie Investment Management and president of Delaware Funds by Macquarie, said in the release. "We are delighted that Foresters has also selected us as manager of a portion of the Foresters general account."

Macquarie will also manage a portion of Foresters' general account supporting its life insurance business, the news release said.

With the deal, Foresters aims to focus more on its core life insurance business now that it has arranged for Macquarie to manage segments of its general account and established a distribution relationship with Cetera Financial Group, the firm announced Tuesday.

"In seeking a firm to acquire and manage our mutual fund assets for U.S. investors, Macquarie Investment Management stood out as a leader that would be able to support our clients with its global platform and its commitment to investment excellence," Jim Boyle, president and CEO of Foresters Financial, the parent company for Foresters Investment Management Co., said in the news release.

Foresters Investment Management Co. acts as investment adviser primarily to the First Investors fund family, according to a Form ADV for the firm.

In a separate transaction, Cetera Financial Group, an El Segundo, Calif.-based independent financial adviser network, announced it will purchase $12 billion in retail assets from Foresters' U.S. broker-dealer and advisory business, a spokeswoman for Cetera said.

Under that agreement, Cetera can invite Foresters Financial's 500 financial advisers to its self-clearing platform and has the option to take over the leases for more than 40 Foresters branch office locations throughout the U.S., a news release from Cetera said.

Terms of the Cetera-Foresters deal were not publicly disclosed. The deal is expected to close late in the second quarter of 2019.