Guggenheim to weigh stake sale for US$250bil asset manager

NEW YORK: Guggenheim Partners is exploring the sale of a stake in its US$250bil asset-management unit overseen by Scott Minerd, according to people familiar with the matter.

Guggenheim Partners Investment Management has been in talks with global insurers, sovereign wealth funds and investment pools in Europe, the Middle East and Asia, the people said.

The Wall Street Journal reported on Wednesday that the deal could involve Guggenheim taking on German insurer Munich Re’s asset management unit.

Discussions are in early stages and it’s possible that no deal is reached, the people said. The firm’s largest investors have been in talks about the strategic options, the people said.

“Guggenheim listens to people who propose acquisitions of stakes from time to time,” Mike Sitrick, an outside spokesman for Guggenheim, said in an email. He declined to comment further. A spokesman for Munich Re declined to comment.

Minerd, 59, is seeking to strengthen his division, which mostly oversees money from insurers, by diversifying the investment base, which is more than 90% from US investors.

More than half of Guggenheim’s assets under management were from insurance companies, including several Guggenheim affiliates and Sammons Enterprises Inc, its biggest shareholder, Minerd said at a June 6 insurance industry conference in New York.

While insurance firms and asset managers have long histories of cross ownership, they also face conflicts, such as differing investing strategies, Minerd said this month at the conference. The best outcomes occur when insurers – or other investors – buy minority stakes in asset managers, he said.

Munich Re shares fell 0.2% at 9:11 am in Frankfurt trading. The stock is down 0.4% this year. Recent insurance and asset-manager tie-ups include Nippon Life Insurance Co’s acquisition of a 25% stake in TCW Group Inc for about US$490mil and MetLife Inc’s acquisition of Logan Circle Partners from Fortress Investment Group LLC, both last year.

In 2014, TIAA purchased Nuveen Investments for about US$6bil. In April, Guggenheim completed the sale to Invesco Ltd of 77 exchange traded funds for US$1.2bil. That transaction was led by Jerry Miller, who was hired last year as president of Guggenheim Investments from Deutsche Bank AG. Minerd, a frequent guest on Bloomberg TV and CNBC, is one of Wall Street’s most visible bond-fund managers. A member of the Federal Reserve Bank of New York investor advisory committee on financial markets, Minerd is known for his bold predictions on markets, economics and central bank policies. He joined Guggenheim, which is run by chief executive officer Mark Walter, in 1998 after high-flying stints at Merrill Lynch, Morgan Stanley and Credit Suisse First Boston.