Aegon USA/Transamerica of Los Angeles has formed a new investment management company, principally to give equity interest in the new company to the portfolio managers and other key executives formerly with Transamerica Investment Services, said Richard Latzer, chief executive officer of the new investment advisor, Transamerica Investment Management.
Portfolio managers, analysts and other leading executives now with the investment management company will own 20 percent of the profits in the investment company and Aegon, which purchased Transamerica in 1999 (MFMN 3/1/99), will own 80 percent.
Aegon USA/Transamerica wanted to form "a limited partnership to provide maximum incentives for performance and asset growth," Latzer said.
A secondary reason for forming the investment company was to enable the company to take a more active distribution role than did Transamerica Investment Services, Latzer said. To accomplish this, the investment company will use all the distribution channels available throughout the firm, including the wholesale broker/dealer, in-house broker, financial planning and bank channels, Latzer said.
Transamerica Investment Management will be the investment advisor for $12 billion in assets in mutual fund, separately-managed and institutional accounts, as well as for the pension funds and the variable annuity and variable life insurance businesses previously managed by Transamerica Investment Services. Aegon USA/Transamerica transferred other, general account assets that Transamerica Investment Services had managed, including private placement, mortgage-backed securities, emerging markets and bank loans, to Aegon in January, Latzer said.
The dissolution of Transamerica Investment Services and formation of Transamerica Investment Management did not involve any addition or elimination of personnel and the Aegon IDEX funds will not be merged into the new investment management company, Latzer said. Aegon's products and brand name will continue to be separate, he said.
Following Aegon's acquisition of Transamerica in February 1999 for $9.7 billion in cash and stock, the firm was unsure whether the Aegon IDEX mutual funds and Transamerica Premier Funds would be marketed together, if the two companies' sales teams would be merged, or if the company would somehow take advantage of the well-known Transamerica name, spokespersons for Aegon and Transamerica said.
The only step that Aegon USA/Transamerica has made to take advantage of the Transamerica name has been to create two clones of Transamerica funds, the Transamerica Premier Equity Fund and the Transamerica Premier Small Company Fund, for Aegon to sell, Latzer said.