Aug. 19 (Bloomberg) -- Lincoln National Corp., the insurer that took a $950 million U.S. bailout, agreed to sell its asset management unit to Macquarie Group Ltd. for $428 million as the firm positions itself to repay a portion of the federal funds.

The sale of Delaware Management Holdings Inc. to the Sydney-based investment bank is expected to be completed by Dec. 31, Lincoln said in a statement today. Lincoln probably won’t book either a loss or a gain on the transaction, the insurer said in a regulatory filing.

Chief Executive Officer Dennis Glass, who turned to the government after investment declines depleted capital, agreed in June to sell a U.K. unit at a loss to Canada’s Sun Life Financial Inc. Philadelphia-based Lincoln announced two rounds of job cuts this year and reported three straight quarterly net losses, pushing Glass to reduce the company’s focus to life insurance and retirement-planning in the U.S.

“This transaction will allow us to focus both management and capital resources on these core businesses,” Glass said in the statement today. The insurance and retirement operations provide “the greatest opportunities for growth.”

Lincoln rose 21 cents to $23.10 at 4:15 p.m. in New York Stock Exchange composite trading. Lincoln has advanced 42 percent from May 14 when the company was approved for government assistance. Hartford Financial Services Group Inc., the insurer that accepted $3.4 billion in U.S. aid in June, gained 30 percent in that span.

Corporate Debt

Life insurers were hurt as the recession soured corporate debt and mortgage investments that the companies held to back policies. The 12-month equity market slump has also increased the cost of protecting savers with retirement accounts called variable annuities.

Lincoln has raised more than $2 billion since May by issuing shares and debt, including the sale of preferred stock to the government under Treasury’s Capital Purchase Program. On July 30, Glass predicted the insurer would repay the U.S. in two years.

“The proceeds of the sale will be used for general corporate purposes, including potentially contributing to retiring a portion of the CPP preferred shares outstanding when it is appropriate to do so,” Lincoln said in today’s statement.

Glass wasn’t available for an interview, said Lauren Sammerson, a spokeswoman for Lincoln.

Delaware, founded in 1929, has more than $125 billion assets under management and provides investment services to retail and institutional investors, Macquarie said in a statement. The combined assets under management of Macquarie and Philadelphia-based Delaware are expected to be over $300 billion once the purchase is completed.

Shifting Focus

Macquarie advanced A$1.13, or 2.5 percent, to A$45.61 at the close of trading in Sydney, taking its advance this year to 58 percent. Macquarie has a market value of about A$15.2 billion ($12.5 billion).

Macquarie CEO Nicholas Moore is shifting focus from buying and pooling assets to advisory businesses after a 16-year run of rising profits was snuffed out by asset writedowns. In May, Macquarie agreed to buy Tristone Capital Global Inc. for C$116 million ($104.6 million) to expand its energy business in Canada.

Separately today, Macquarie and China Everbright Ltd. said they plan to raise $1.5 billion for two funds to invest in infrastructure projects in China, Taiwan and Hong Kong.

To contact the reporter on this story: Andrew Frye in New York at afrye@bloomberg.net; Malcolm Scott in Sydney at mscott23@bloomberg.net

Last Updated: August 19, 2009 17:09 EDT