Private equity is bidding for RS Investments, the asset management business that’s being sold by Guardian Life Insurance Company of America.
New York-based Guardian Life put RS Investments up for sale earlier this summer, Reuters reported. Morgan Stanley is advising. The auction is currently in the second round, a source said.
Bidders include RidgeWorth Investments, Victory Capital, Virtus Investments Partners Inc. as well as two private equity firms, two sources said.
The identify of the two PE firms is unclear. However, Ridgeworth is backed by Lightyear Capital. Crestview Partners, meanwhile, owns Victory Capital.
It’s also unknown how much Guardian is seeking for RS, whose EBITDA has been shrinking, one of the sources, a banker, said. RS, of San Francisco, is an investment manager with $19.8 billion in assets under management as of July 31, the firm’s website said. Guardian Life bought RS in 2006 when the asset manager reportedly had $11.8 billion in AUM.
Victory will likely be the winner of RS, the banker said. “They’ve made other acquisitions and already put Munder and Victory together,” the banker said.
Brooklyn, Ohio-based Victory has about $35.7 billion in AUM as of June 30. Victory, in April, acquired Compass Efficient Model Portfolios. It also closed its “buy” of Munder Capital Management, which is also a Crestview portfolio company, in December.
Crestview tried to sell Munder in 2013 but pulled the auction after getting low bids. It chose to merge it with Victory last year.
In May, Virtus severed ties with F-Squared Investments but its mutual funds are still seeing outflows, Barron’s reported in July citing Goldman Sachs Group analyst Alexander Blostein. F-Squared is the ETF strategist that agreed to pay $35 million to regulators last year to settle fraud charges. Broadmeadow Capital is buying pieces of F-Squared, which filed for Chapter 11 bankruptcy protection last month.
Executives for Guardian, RS, Crestview, Morgan Stanley and Virtus declined comment. Ridgeworth, Lightyear and Victory couldn’t be reached for comment.
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