The London Stock Exchange Group (LSEG) recently completed its due diligence review of Russell Investments as part of the ongoing takeover of Russell’s various business lines, following an acquisition from Northwestern Mutual valued at more than $2 billion.
LSEG says the comprehensive review focused principally on assessing the strategic fit of Russell’s investment management resources with the group’s long-term strategy. “After careful consideration the conclusion of the comprehensive review is to explore a sale of this business [unit] in its entirety,” LSEG says.
LSEG notes that it has already received a number of expressions of interest in a potential acquisition of Russell Investment Management, as the investment management portion of Russell’s business is known. A sale process of the business will now commence, LSEG says.
LSEG says it will focus on maintaining management and employee continuity and providing strong support for continued growth and innovation across the Russell businesses. In the meantime, LSEG continues to focus on successfully integrating Russell Indexes with its FTSE Index organization, the firm says. This part of the deal brings brings more than $9 trillion in benchmarked assets under one roof.
One retirement industry expert tells PLANSPONSOR the shift in ownership of the Russell indexes presents a good opportunity for retirement plan fiduciaries and investors to think a little deeper about how their portfolios are built and measured. Speaking in December 2014, Jeff Elvander, chief investment officer for NFP Retirement, suggested it was possible LSEG would look for another buyer for the investment management portion of Russell.
“It’s not the biggest aspect of the deal—Russell only manages about $250 billion directly—but LSEG hasn’t had a direct investment arm as part of its operations before,” he said. “So I think there should be some interest there for plan sponsors and participants just to make sure they understand how any products or services could be impacted by the transition.”
Further updates will be made as appropriate, LSEG says.