THE LONDON Stock Exchange (LSE) emerged yesterday as a potential bidder for Seattle-based asset management firm Frank Russell investments, in a deal that could see it tap investors for cash.
Parent company Northwestern Mutual life insurance started exploring the potential sale of Russell in January, following the decision that the firm was not one of its core assets.
Although there was no confirmation of any formal bid, LSE announced yesterday that it is considering the merits of the purchase and is in talks with Northwestern Mutual.
According to sources the company has already attracted interest from private equity firms, including a tie-up of Warburg Pincus and TPG Capital as well a collaboration between CVC Capital Partners and Silver Lake. The Carlyle Group is also believed to have considered the acquisition earlier in the year, but is no longer interested.
LSE’s late contention would make it one of a small group of potential bidders for the firm, adding to recent interest from MSCI and Canadian Bank of Commerce (CIBC) just last month.
Northwestern Mutual bought Frank Russell for just over $1bn (£594m) in 1999, and the firm was valued earlier this year at $3bn.
The insurance company aims to sell both the investment management services, valued at £600m, as well as indexes, valued at $2.4bn, which hold a total of $259.7bn in assets altogether.