AEGON USA Inc., Baltimore, agreed to purchase the group pension assets of The Mutual Life Insurance Co. of New York, which includes $3.6 billion in manager of manager separate account assets and $2.7 billion of general account assets.
Terms of the deal were not disclosed, in part because the price is contingent on the performance of the assets sold (MONY will receive performance-tied payments over the next nine years). In addition, MONY will purchase $200 million in notes issued by AEGON USA. The general account assets sold will continue to be managed contractually by MONY.
With the purchase, AEGON created an independent unit, Diversified Investment Advisors, Purchase, N.Y., to service the pension assets it purchased.
Diversified Investment will target middle-market pension plan sponsors who typically can't afford consultants, said Christopher H. Cumming, vice president of marketing of the new unit.
Tom Schlossberg, president of Diversified, said the firm will provide products such as investment management monitoring, employee education and administrative and technical services. Those are things the firm did before, but it will now market itself as a separate organization dedicated to servicing pension plans, he said.
For MONY, the sale is the culmination of a decision to reposition its core businesses, said Michael I. Roth, chairman and chief executive.
The firm will focus on mutual funds, life insurance and disability insurance, he said. Subsequent to the sale, MONY's claims paying ability and its senior debt rating was placed on Standard & Poor's Corp.'s CreditWatch with positive implications.
- Paul G. Barr