Ameriprise Financial, Inc has signed a definitive agreement with BMO Financial Group (BMO) to acquire its EMEA asset management business for GBP615 million, or approximately USD845 million. The all-cash transaction adds USD124 billion of AUM in Europe and is currently expected to close in the fourth quarter of 2021, subject to regulatory approvals in the relevant jurisdictions.
The acquisition will further accelerate Ameriprise’s core strategy of growing its fee-based businesses and increase the overall contribution of Wealth Management and Asset Management within its diversified business. Together with BMO’s EMEA asset management business, Ameriprise will have more than USD1.2 trillion of assets under management and administration.
The acquisition complements Columbia Threadneedle Investments’ core business and global growth strategy, adding a substantial presence in the European institutional market and considerably expanding its investment capabilities and solutions to meet growing client demand. The addition of BMO’s EMEA asset management business will increase Columbia Threadneedle’s AUM to USD671 billion. It will significantly increase EMEA AUM and expand AUM in the region to 40 per cent of total Columbia Threadneedle AUM.
In addition, the acquisition establishes a strategic relationship with BMO Wealth Management giving its North American Wealth Management clients opportunities to access a range of Columbia Threadneedle investment management solutions. Separately, in the US, the transaction also includes the opportunity for certain BMO asset management clients to move to Columbia Threadneedle, subject to client consent.
The transaction is expected to be accretive in 2023 and to generate an internal rate of return of 20 per cent. Given the firm’s substantial excess capital position and free cash flow generation, the company’s capital return strategy remains on track.
Jim Cracchiolo, Chairman and Chief Executive Officer, Ameriprise Financial, says: “We’ve built an outstanding global asset manager that complements our leading wealth management business and generates strong results. BMO’s EMEA asset management business will be a great addition to Columbia Threadneedle that will deliver meaningful value for clients and our business. This strategic acquisition represents an important next step as we expand our solutions capabilities, broaden our client offering and deepen our talented team. We are a disciplined acquirer and believe this transaction will build on our track record of successful acquisitions for the benefit of clients and our other stakeholders.”
The acquisition is expected to expand and enhance Columbia Threadneedle’s established strengths and accelerate our strategy. It positions them well to respond to the developing needs of their clients by adding key capabilities in growing segments where BMO’s EMEA asset management business has leading positions that can be leveraged globally, including:
- Responsible Investment (RI) – A recognized leader with a broad range of specialist ESG products and a leading responsible engagement overlay service providing corporate engagement on equity and bond holdings, and proxy voting services
- Liability Driven Investing (LDI) – A top four LDI business in Europe and dominant in the small/mid-market sector
- Fiduciary/outsourced management (OCIO) – A key solutions business that includes fiduciary teams in the Netherlands and UK
- European Real Estate – A continental European direct real estate capability based in Germany and France
In addition, the transaction adds depth and breadth in other traditional asset classes. BMO’s European fund range comprises several publicly traded investment trusts, including F&C Investment Trust PLC, the world’s longest-tenured investment trust, which complements our Tri-Continental Corporation, the longest-tenured closed-end fund in the US.
Ted Truscott, Chief Executive Officer, Columbia Threadneedle Investments, says: “Adding BMO’s EMEA asset management business is an exceptional growth opportunity. The transaction advances our strategy and enhances our geographic and asset class diversification, enabling us to serve more clients and meet more of their needs. Critical to this opportunity is the strong alignment between our organizations. We share a client-centric culture, fundamental belief in active management, collaborative and research-based investment approach, and long-held commitment to responsible investment principles.”
Truscott concludes: “Establishing a new strategic relationship with BMO Wealth Management is an important benefit of the transaction. We will bring an even stronger set of capabilities to serve the needs of their Wealth Management clients in Canada and the US.”
Joanna Rotenberg, Group Head, BMO Wealth Management, says: “Columbia Threadneedle Investments is a strong strategic and cultural fit for our EMEA asset management business and is well positioned to take it to the next level of growth by extending its reach, scale and investment capabilities. We look forward to our strategic relationship and offering our North American Wealth Management clients opportunities to access a wide range of Columbia Threadneedle investment management solutions.”