Russell Investments has announced it has entered into an agreement to acquire Zurich Investment Management (ZIM) in a transaction estimated to add nearly $2 billion in funds under management to the combined organisation.
The acquisition will take Russell Investments’ retail and wealth funds under management in Australia to approximately $11 billion, while also expanding its distribution via the local financial adviser market. The terms of the deal have not been disclosed.
“This acquisition adds to the strong growth and momentum in our Australia wealth business,” Russell Investments head of Asia-Pacific Jason Edgar said.
“Delivering institutional-grade investment solutions to wealth advisers is a global priority for Russell Investments. Adding a business of ZIM’s calibre will enable us to extend these capabilities to even more advisers and reinforces our commitment to leading in this fast-growing segment of the Australian market.”
He added growing Russell’s retail and wealth business is a strategic priority both in Australia and globally, and that the acquisition would expand its distribution footprint, but it is not forecasting adviser numbers.
Zurich Australia and New Zealand chief executive Justin Delany indicated the decision to divest the investment arm of the business was made to prepare the company for its next phase of growth. It reflects where Zurich is heading as an organisation as the move will allow greater focus on the Australian insurance market.
“Over many years, Zurich Investment Management has delivered compelling managed fund solutions to Australian investors,” Delany said.
“Russell Investments brings global scale, deep investment capabilities and a strong local presence, making it an ideal partner for our advisers, investors and employees.”
The two parties confirmed there would be no immediate changes to the range of products currently managed by ZIM, with its distribution, client-facing and retail investment specialists joining Russell Investments Australia on completion of the deal.
“There are no immediate plans to change the funds and we remain focused on continuity for advisers and investors. The branding will transition at the appropriate time after completion,” Edgar explained.
The acquisition is expected to be finalised towards the end of the first quarter of this year.
The combined team will then work on extending Russell Investments’ capabilities to a wider group of advisers.
