Sydney: Macquarie Group Ltd, Australia’s top investment bank, agreed to buy US asset manager Delaware Investments for $428 million in cash, continuing a trend in consolidation in the fund management business.
Macquarie, which has weathered the global financial crisis better than its global peers, has been on the lookout for acquisitions, taking advantage of the falling asset prices.
The deal would boost Macquarie’s total assets under management to over $300 billion, Macquarie said in a statement on Wednesday.
“The acquisition of Delaware is a demonstration to our clients of the ongoing commitment we have to developing a global asset management capability with significant scale, product depth, research and investment capacity,” said Shemara Wikramanayake, global head of Macquarie Funds Group said in a statement.
Delaware manages about $125 billion in assets and the deal was subject to regulatory approvals, Macquarie said. Delaware was a unit of Lincoln National Corp.
“Macquarie has still got a lot of surplus capital sitting there and they have a got a lot of powder. This is certainly a step in the right direction,” CLSA analyst Brian Johnson said.
Industry experts expect a wave of consolidation in the fund management industry following BlackRock’s $13.5 billion deal to buy a asset management unit of Barclays.
Bank of America has been trying to sell its Columbia Management unit, for instance.
Macquarie has used the previous market declines to buy up distressed assets. In BT’s Australian operations in 1999 and ING Group’s Asian equities business in 2004.