(February 21, 2014) — European insurance group Legal & General has agreed to buy one of the largest US target date fund (TDF) providers to further its push into the defined contribution (DC) market.
The company announced today that a deal to acquire Global Index Advisors (GIA) for a maximum price of $50.4 million is set to complete in the second quarter of the year, subject to shareholder approval.
The purchase has been made by the group’s US fund arm, Legal & General Investment Management America, and will take its assets to $50 billion in the country.
“International expansion and the DC market are two extremely important drivers of future growth for Legal & General Investment Management (LGIM), and the acquisition of Global Index Advisors today will allow us to accelerate our expansion in the US DC market,” said Mark Zinkula, CEO of LGIM.
He said the purchase would allow the firm to better access the US DC market, which is forecast to double to $12 trillion by 2017, according to consulting firm Casey Quirk. GIA was founded in 1994 and makes index TDF products for the DC market. It is also an investment sub-advisor to the Wells Fargo Advantage Dow Jones TDFs, which have $15.6 billion in assets.
The acquisition is the first the company has made in the US. At the end of September the group had global assets under management of $738 billion.
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