Nationwide Financial has beefed up its mutual fund portfolio by adding 17 new equity and bond funds from HighMark Capital Management worth some $3.6 billion in assets. Terms of the deal are not being disclosed.
HighMark, a wholly owned subsidiary of Union Bank, N.A., will become the subadviser to the nine funds that it currently manages. In addition to HighMark, eight of the 17 mutual funds are subadvised by three other asset managers, including Bailard, Geneva Capital Management Ltd, and Ziegler Lotsoff Capital Management.
“This agreement with Nationwide refines our strategy and strengthens HighMark’s position by allowing us to focus on growing our core business of providing asset management services to institutional and high net worth clients,” stated Dennis Mooradian, president of HighMark Capital Management and executive vice president of Union Bank.
Michael Spangler, president of Nationwide Funds, told Money Management Executive that his firm was attracted to Highmark’s funds because of their “product breadth and quality.” “They have a wide range of investment offerings for advisors and their clients. These funds are very core and align well with what we offer,” he said.
In a sperate deal, Highmark sold off five money market funds to Reich & Tang. The funds represents more than $4 billion in shareholder assets. The deal is expected to close by July 2013.
New York-based Reich & Tang currently manages some $30 billion across money market mutual funds, FDIC insured programs, and separately managed account portfolios.
The deal, for which Cambridge International Partners served as adviser to Reich & Tang, is the second acquisition in six months for the company, which completed a merger of the ValueLine U.S. Government Fund in 2012.
Berkshire Capital Securities acted as the financial advisor and Bingham McCutchen as the legal advisor to HighMark and Union Bank.