Sydney-based Macquarie Asset Management has agreed to acquire Waddell & Reed Financial Inc., an Overland Park, Kan.-based money manager with roughly $68 billion in assets under management, for $1.7 billion, the two firms said Wednesday.
Waddell & Reed also has a wealth management business, with about $63 billion in assets under advisement. Upon completion of the deal, Macquarie said it plans to sell the wealth management unit to LPL Financial Holdings for $300 million, while entering into a long-term partnership the firm said will make Macquarie one of LPL’s top strategic asset management partners.
Macquarie, the money management arm of Australian financial giant Macquarie Group, will absorb Waddell & Reed's $68 billion asset management business, lifting the firm's global AUM to more than $465 billion.
The acquisition, expected to be completed by mid-2021, would make Macquarie a top 25 manager of actively managed mutual funds in the U.S. Currently, the firm ranks 40th, a Sydney-based spokeswoman for the company said.
The announcement heralds Macquarie's first major asset management acquisition since the firm bought Delaware Investments and its $125 billion in assets under management in late 2009.
The move finds Macquarie adding asset management scale at a time when some of its big financial competitors in Australia are moving in the opposite direction.
In late 2018, Commonwealth Bank of Australia sold its A$213 billion ($157.2 billion) First Sentier Investments money management arm to Mitsubishi UFJ Trust and Banking.
More recently, AMP Ltd. said it was considering a bid from U.S.-based alternatives fund manager Ares Management to acquire its AMP Capital money management arm, which had roughly $133 billion in AUM.
The Macquarie spokeswoman said her firm's asset management business is adding scale in a business where scale is a key to success. She declined to say whether Macquarie remains on the hunt for further acquisitions.