PNC Financial Services Group, Pittsburgh, is in talks to sell its $54.6 billion institutional asset manager, PNC Capital Advisors, to Federated Investors, according to multiple sources.
Under the potential deal, Federated, which is also based in Pittsburgh, sees an opportunity to acquire additional money market assets, which represent a significant chunk of PNC Capital Advisors' business, three sources, who spoke under the condition of anonymity, told Pensions & Investments this week.
One source said a deal could be announced as soon as next week.
PNC Capital Advisors is headquartered in Baltimore, according to its most recent Form ADV dated March 29, but the firm has six investment teams across five offices in Baltimore, Chicago, Cleveland, Philadelphia and St. Louis, according to the firm's website.
The firm serves institutional investors, including corporations, public pension funds, multiemployer plans, endowments and foundations, health-care organizations, insurance companies and financial intermediaries, its website states.
In addition to acquiring PNC's assets, Federated has discussed bringing on PNC's international equity investment team in Cleveland, though it is unclear whether additional investment staff members would also join under a deal, two sources said.
As such, some employees have begun looking for outside opportunities should their roles be eliminated, one source added.
"I've heard that something was afoot at Federated and that was probably two weeks ago. It is a transaction that would make a good deal of sense," one anonymous source told P&I. "PNC has never made a startling success of its (asset management) business, and Federated could use both scale and diversity of product," the source added.
Federated reported $484.9 billion in assets under management as of March 31, up 5% from Dec. 31, and up 24% from a year earlier. Money market assets represented more than 65% of Federated's total AUM, as of March 31, its first-quarter earnings statement said.
Separately, Federated has been seeking out merger and acquisition opportunities lately, having recently completed its acquisition of a 60% stake in Hermes Investment Management in early July from the £49.3 billion ($65 billion) BT Pension Scheme, London. That deal boosted Federated's environmental, social and governance capabilities.
On Tuesday, a spokeswoman at PNC declined to comment for this story, stating: "We don't comment on rumors or speculation."
A Federated spokesman also said Tuesday that it is the company's policy to not comment on rumors and speculation.
