LEGAL & GENERAL completes ACQUISITION of GIA business - adviser
on $21bn of assets.
Legal & General Group Plc ("Legal & General") has today completed the acquisition of the business of Global Index Advisors, Inc ("GIA") following receipt of fund shareholder approval from the $16.0bn1 Wells Fargo Advantage Dow Jones Target Date Funds.
We have also received approval to advise a further $5.5bn1 of GIA's assets. This increases the assets included within the transaction to $21.5bn1 and primarily accounts for the increase in assets compared to the $15.6bn announced on 21 February 2014.
GIA was formed in 1994 to create and market index target date fund products in the US and is now a top 52 provider of these funds in the US. The target date fund market in the US is expected to double by 2017.
Legal & General has identified the international expansion of Legal & General Investment Management ("LGIM") as one of its five growth themes. This acquisition will provide scale and distribution in the $6 trillion US defined contribution ("DC") market3 as we build on LGIMA's existing Liability Driven Investment ("LDI") and active fixed income capabilities. LGIM's proforma international assets at 31 March 2014 have increased as a result of the acquisition from $106.8bn1 to $128.3bn1 underlining our strategic commitment to become a global provider of investment solutions.
The initial consideration of the transaction is $30.75m with deferred consideration of $1.5m payable over the period of 2 years from the date of completion and further payments of up to a maximum of $18.15m payable over 3 years from the date of completion, subject to performance and other conditions being met. The consideration is unchanged from our announcement on 21 February 2014.
Mark Zinkula, Chief Executive Officer, Legal & General Investment Management said:
"I'm delighted the acquisition has been completed and welcome Jim Lauder and his team to LGIM. This transaction now means LGIMA's proforma assets exceed $60bn1, placing us in an excellent position to grow our DC assets in the US market and accelerating LGIM's already strong international growth."
1. As at 31 March 2014.
2. Morningstar Fund Research Target-Date Series Research Paper 2013
3. Source: Casey Quirk U.S. DC Model
For further information, please contact:
Investors:
Bernie Hickman Group Financial Controller and Investor Relations Director 020 3124 2043
Stephen Thomas Investor Relations Manager 020 3124 2047
Laura Doyle Investor Relations Manager 020 3124 2088
Media:
John Godfrey Group Communications Director 020 3124 2090
Richard King Head of Media Relations 020 3124 2095
Notes to editors:
1. A target date fund, also known as a lifecycle, dynamic-risk or age-based fund, is a collective investment scheme, often a mutual fund or a collective trust fund, designed to provide a simple investment solution through a portfolio whose asset allocation mix becomes more conservative as the target date (usually retirement) approaches.
2. Target date funds are one of the alternatives for Qualified Default Investment Alternatives ("QDIA") as defined by the US Department of Labor.
3. Legal & General Group Plc4
Established in 1836, Legal & General is a leading provider of insurance, savings and investment management products in the UK. The Group has a market capitalisation of $22.5bn5 and is responsible for investing $782bn worldwide (as at 31 March 2014) on behalf of investors, policyholders and shareholders. We have over seven million customers in the UK for life assurance, pensions, investments and general insurance plans and over one million customers in the US who rely on us for life assurance. In 2013, Legal & General's profits before tax (on the IFRS basis) were $1.9bn; earnings per share were 25.7c and dividends per share 15.7c for the period, an increase of 10%, 10% and 22% respectively.
4. $:£ exchange rate 1.69
5. As at 19th May 2014
For more information on Legal & General, please see http://www.legalandgeneralgroup.com/
4. Global Index Advisors, Inc
Global Index Advisors is an SEC registered investment advisor engaged in the business of advisory services in relation to the design and operation of target date fund products for defined contribution plan sponsors and participants.
For more information on GIA, please see http://www.globalindexadvisors.com/
Forward looking statements
Nothing in this announcement should be construed as a profit forecast. This document may contain certain forward-looking statements relating to Legal & General Group, its plans and its current goals and expectations relating to future financial condition, performance and results. By their nature forward-looking statements involve uncertainty because they relate to future events and circumstances which are beyond Legal & General's control, including, among others, UK domestic and global economic and business conditions, market related risks such as fluctuations in interest rates and exchange rates, the policies and actions of regulatory and Governmental authorities, the impact of competition, the timing impact of these events and other uncertainties of future acquisition or combinations within relevant industries. As a result, Legal & General Group's actual future condition, performance and results may differ materially from the plans, goals and expectations set out in these forward-looking statements and persons reading this announcement should not place reliance on forward-looking statements. These forward-looking statements are made only as at the date on which such statements are made and Legal & General Group Plc does not undertake to update forward-looking statements contained in this document or any other forward-looking statement it may make.
