Federated Investors has entered into an agreement with Touchstone Advisors under which Federated will acquire certain assets related to the management of Touchstone Value Opportunities
Federated Investors has entered into an agreement with Touchstone Advisors under which Federated will acquire certain assets related to the management of Touchstone Value Opportunities Fund and Touchstone Diversified Small Cap Value Fund.
In conjunction with the acquisition, two Federated mutual funds will acquire approximately USD233m in assets from the two Touchstone mutual funds.
Jill T. McGruder, president of Touchstone Funds, says: "With the creation of similar funds by Federated following its acquisition of certain assets of Clover Capital Management in late 2008, the two fund reorganisations make sense for Touchstone fund shareholders. The reorganisations provide consistency in that each fund will continue to be managed by the same team of managers utilizing substantially the same investment strategies and techniques."
The assets of the USD151m Touchstone Value Opportunities Fund will be reorganised with the Federated Clover Value Fund, and the assets of the USD82m Touchstone Diversified Small Cap Value Fund will be reorganised with the Federated Clover Small Value Fund.
"Federated Clover’s investment team has historically delivered above-market returns with lower-than-average risk in the traditional value space and current Federated Clover fund shareholders can benefit from the increase in assets related to the reorganisation of the Touchstone funds’ assets," says J. Christopher Donahue (pictured), president and chief executive officer of Federated. "Federated continues to evaluate multiple acquisition opportunities to add assets to our franchise."
In late 2008, Federated purchased substantially all of the assets of Clover Capital Management, which had sub-advised the Touchstone Value Opportunities Fund and Touchstone Diversified Small Cap Value Fund since their respective inception dates. Since that time, Clover’s business relating to the management of these two Touchstone Funds has been operated within the Federated Clover Investment Advisors division of Federated Global Investment Management, a wholly owned subsidiary of Federated.
The boards of trustees of the Federated funds and the Touchstone funds unanimously approved the planned funds’ reorganisations, which are now subject to certain conditions and approvals, including the approval of each respective Touchstone fund’s shareholders. It is anticipated that both of the Touchstone funds’ shareholder meetings to approve these proposed reorganisations will be held in August 2009.
The financial terms of the definitive agreement were not disclosed.
