The London Stock Exchange (LSE) will sell Russell Investment Management for about US$1.4 billion, according to a Reuters report.
In a statement issued last Thursday, LSE confirmed Russell Investment was for sale, a move widely expected after the UK exchange business bought the Frank Russell group last year from US insurer Northwestern Mutual for about US$2.7 billion.
While LSE will shuck off the Russell investment arm, the statement said the group is proceeding with plans to merge its existing FTSE indices business with Russell Indexes.
The LSE statement said a number of interested parties had already expressed interest in the Russell Investment business with Reuters reporting at least three potential purchasers, including the Canadian Imperial Bank of Commerce, lined up.
Russell Investments New Zealand provides funds management and investment consultancy services to a range of charities, super funds and other entities, including the BNZ KiwiSaver scheme. Wellington-based firm, Implemented Investment Solutions also distributes Russell products to the retail and wholesale markets.
Alister van der Maas, Russell NZ chief, was not able to comment on the proposed sale.
As at September last year, globally Russell Investments managed about US$275 billion. However, LSE was always more interested in the Russell index arm, which has grown exponentially in recent years on the back of the strong global trend to passive investments such as exchange-traded funds (ETFs).
“LSE continues to focus on successfully integrating Russell Indexes with FTSE, delivering on the identified synergies and fully harnessing the significant opportunities that lie ahead in creating the leading global indices business,” the LSE statement said.
Neither Russell nor FTSE has a direct index presence in New Zealand. However, FTSE is marketing products to New Zealand from its Australian office.
Last week FTSE released two new capped versions of its infrastructure indices: the Global Core Infrastructure Capped 50/50 Index, and; the Developed Core Infrastructure Capped 50/50 Index.