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Reich & Tang acquires HighMark Funds’ money market mutual fund business

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Reich & Tang is to acquire five money market funds from HighMark Capital Management, a wholly-owned subsidiary of Union Bank.

 
The deal, which represents more than USD4bn in shareholder assets, has been approved by each company’s board of trustees and is expected to close by July 2013.
 
New York-based Reich & Tang is a cash management and liquidity specialist servicing broker-dealer, bank, and institutional markets, and is the third longest running money market mutual fund manager in the world. Reich & Tang currently supervises nearly USD30bn across money market mutual funds, FDIC insured programmes, and separately managed account portfolios. Reich & Tang is a subsidiary of Natixis Global Asset Management.
 
“We are extremely pleased to have entered into this arrangement with HighMark Capital Management,” says Michael Lydon, chief executive officer of Reich & Tang. “The similarity in both firms’ business structures creates an ideal pairing for a seamless acquisition, which will provide HighMark Fund shareholders with immediate cost benefits and integration into a highly stable, diversified client base.”
 
“A key benefit of the transaction is that our shareholders will have access to one of the industry’s longest-tenured and time tested mutual fund advisers whose conservative investment philosophy is consistent with that of HighMark Funds,” says Dennis Mooradian (pictured), president of HighMark Capital Management and executive vice president of Union Bank. “With cash becoming an increasingly important asset class, particularly over the past five years, we realise the importance of partnering with a specialist whose infrastructure for sweep programs will undoubtedly ensure that our shareholders experience a seamless transition.”
 
HighMark Capital Management remains focused on managing institutional and high net worth assets for its wealth management and separately-managed institutional businesses where it will oversee more than USD15bn in client assets.
 
“This agreement with Reich & Tang refines our strategy and strengthens HighMark’s position by allowing us to focus on growing our core business of providing asset management services to institutional and high-net-worth clients,” Mooradian says.
 
The deal, for which Cambridge International Partners served as adviser to Reich & Tang, is the second acquisition in as many years for the company, which completed a merger of the ValueLine US Government Fund in 2012.
 
“The HighMark Funds acquisition represents an important step in our company’s strategic growth plans,” adds Lydon. “Adding to our already diversified money market mutual fund and expanded FDIC insured offerings underscores our commitment and singular focus in providing the most value to clients and shareholders to meet their unique liquidity and cash management needs.”
 
Berkshire Capital Securities acted as the financial adviser and Bingham McCutchen as the legal adviser to HighMark Capital Management and Union Bank.

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