Federated Is Buying A Chunk of RidgeWorth

SunTrust Banks finally announced some good news Friday when it said Federated Investors has agreed to buy RidgeWorth’s money market assets.

Federated is acquiring RidgeWorth’s money market mutual funds which have $17 billion in assets. The deal includes nine RidgeWorth money market funds that will be transitioned into six Federated money market funds. 

Federated has been in talks to buy the RidgeWorth money funds since January, sources say. It’s not clear how much the deal is worth but Federated is expected to pay less than $75 million for the funds, one banker said.

SunTrust said it’s retaining RidgeWorth’s long-term asset management business, which comprises most of the business. RidgeWorth, along with its boutiques, managed $65.1 billion in assets as of March 31.

The Federated deal, which is expected to close by year end, gives some relief to SunTrust, which has failed twice to sell RidgeWorth. Most recently, in June, SunTrust’s discussions to sell portions of RidgeWorth to UK investment manager Henderson Group fell through.

SunTrust is trying to pay off $4.9 billion in TARP funds. The Atlanta bank said Friday that it has completed its strategic review for RidgeWorth and is keeping the long term asset management business. This is in line with what we heard. Last week, peHUB reported the RidgeWorth was currently off the block.