Legal & General Group Plc agreed to buy Global Index Advisors Inc. in its first U.S. investment management acquisition, which will boost assets in North America to more than $50 billion.
Britain’s largest manager of pension funds agreed to pay as much as $50.4 million for the Atlanta-based investment adviser that specializes in target-date retirement funds, L&G said in a statement today. TDFs shift assets to more conservative investments as a client ages.
L&G Chief Executive Officer Nigel Wilson is seeking acquisitions to capitalize on global pension changes and an aging population. He bought four businesses in 2013, including Lucida Ltd., a bulk annuity buyout firm, and Cofunds Holdings Ltd., an electronic savings portal. Today’s deal is expected to be completed in the middle of 2014, the London-based company said.
“The acquisition of Global Index Advisors today will allow us to accelerate our expansion in the U.S.,” said Mark Zinkula, CEO of L&G’s investment unit in London. “International expansion and the defined contribution market are two extremely important drivers of future growth.”
Defined-contribution pensions don’t guarantee future benefits to policyholders. The U.S. market for the products is estimated at $6 trillion, according to L&G. TDF assets are forecast to double by 2017, the company said.