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Rating:Deal Lifts Cloud Over American Beacon Not Rated 5.0 Email Routing List Email & Route  Print Print
Thursday, April 17, 2008

Deal Lifts Cloud Over American Beacon

Reported by Armie Margaret Lee

A day after the $480 million sale of American Beacon Advisors to private equity firms came to light, American Beacon chairman Bill Quinn spoke to The MFWire on the deal and what lies ahead.

Bill Quinn
American Beacon Advisors
Quinn said the deal would allow American Beacon to "grow our business a little quicker than we would normally under AMR," referring to American Beacon's parent, AMR Corp., which also owns American Airlines. American Beacon advises 19 mutual funds with AUM of about $31 billion.

"It's no secret that the airline industry is a little under pressure now and that tends to have a little bit of a negative cloud over our operations if we continue to be part of the airline," Quinn said.

American Beacon Advisors
4151 Amon Carter Blvd.,
Fort Worth, TX 76155

  • Founded: 1987

  • '40 Act Funds: 19

  • '40 Act AUM: $31 billion

  • Total AUM: $65 billion

  • Employees: 70
  • American Beacon has about 70 employees. The firm saw a 40 percent growth in gross revenue and income in 2007 compared to 2006. In 2007, American Beacon recorded gross revenue of $101 million and income before taxes of $48 million, which means the sale price is 10 times EBITDA.

    The buyer of American Beacon is Lighthouse Holdings, which is owned by investment funds affiliated with TPG Capital Group, one of the world's biggest private equity firms, and Pharos Capital Group.

    Quinn said deal discussions with interested buyers began last November, after AMR executives said they were doing an evaluation of non-core assets.

    "Half a dozen people were interested in acquiring the firm," Quinn said. Besides private equity firms, interested parties included asset management firms and other financial services companies, he said.

    American Beacon's soon-to-be owners, he said, are able to "devote more time and resources to help us grow and strategize than we were able to do in the past."

    Quinn said he will stay on after the deal closes.

    "I've decided to defer my retirement for a couple of years," said Quinn, who turned 60 in January and relinquished the CEO post to Douglas Herring that month.

    Though the firm, which rechristened itself in 2005, will undergo a change in ownership, don't expect it to undergo another name change.

    "We changed our name only three years ago, we're not going to change it again," Quinn said. "The American Beacon brand has been very successful."

    Founded in 1987, American Beacon started out as a manager of AMR's benefit plans and cash. It has since added to its product line and worked with third-parties as well.  

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