Under the terms of the deal, Waddell & Reed will become investment adviser for eight actively managed Advantus Series Funds, Inc, with $1.2 billion in assets, and 11 retail Advantus mutual funds with approximately $525 million in assets. Further, Waddell and Reed will manage approximately $200 million in actively managed equity assets within the general accounts of Minnesota Life Insurance Company and Securian Holding Company and receive approximately $150 million in assets, for investment into the Ivy Funds, from Advantus’ actively managed unregistered separate accounts, according to a news release.
Management of these assets will transition to Waddell & Reed over a period of roughly six months:
- Approximately $1.2 billion in equity assets will be managed by Waddell & Reed effective May 1, 2003
- Another $780 million in equity assets will be advised by Waddell & Reed at the closing of the series fund and retail fund mergers, anticipated in September 2003 and November 2003, respectively
- The remaining $120 million is expected to transfer to Waddell & Reed over the next six months.
Once acquired, Waddell & Reed will bring the new assets into its fold by:
- Merging the Advantus Series funds into the W&R Target fund family.
- Mapping the unregistered separate accounts into Ivy Funds of like objective.
- Managing the managed equities in the Minnesota Life and Securian Holding Company general accounts as separate accounts.
In turn, the strategic alliance calls for the retention of Advantus Capital Management as subadvisor on three current Advantus retail funds that will become part of the Ivy Funds family. Also, Minnesota Life Insurance Company insurance products will be marketed in Waddell & Reed’s proprietary distribution system.
The alliance has been approved by the board of directors of Waddell & Reed and Securian and are now awaiting approval by the trustees of the Ivy Funds, the board of directors of the W&R and W&R Target Funds, and the board of directors of the Advantus Funds. Final approval of the fund mergers requires approvals from the shareholders of the Advantus Funds, as well as customary regulatory approvals.