AMR Corp., which owns American Airlines, has finished the $480 million sale of American Beacon Advisors to Lighthouse Holdings. Lighthouse is owned by investment funds affiliated with private equity firms Pharos Capital Group and TPG Capital.
AMR will acquire a small equity stake in Lighthouse's parent.
Founded in 1986, American had AUM of $57 billion as of end-August. The deal was first announced in April (see
The MFWire, April 16, 2008).
"Pharos and TPG believe that the asset management business is a robust sector, in which American Beacon is a strong leader with an outstanding, 20-year track record of performance in multiple-asset classes across a variety
of investment cycles," said Kneeland Youngblood, co-founder and managing partner of Pharos Capital.
For his part, American Beacon Advisors chairman Bill Quinn said that with American Beacon substantially increasing its third-party revenue over the past several years, "we believe the timing of the divestiture is just right for our company, our customers and our employees."
Company Press Release
FORT WORTH, Texas, Sept. 15 /PRNewswire-FirstCall/ -- AMR Corporation, the parent company of American Airlines, Inc., announced today that it has
completed the sale of American Beacon Advisors, Inc., its wholly owned
asset-management subsidiary, to Lighthouse Holdings, Inc., which is owned by
investment funds affiliated with Pharos Capital Group, LLC and TPG Capital,
L.P., two leading private equity firms. AMR received a total consideration of
$480 million. While primarily a cash transaction, AMR will acquire a small
equity stake in the parent company of Lighthouse Holdings.
American Beacon Advisors has consistently grown since its creation in 1986, adding new products and growing assets under management to $57 billion
as of Aug. 31, 2008. This transaction creates one of the largest
minority-owned investment management firms in the country.
American Beacon will continue to provide a number of services for AMR and
its affiliates, including cash management for AMR and investment advisory
services and investment management services for American Airlines pension,
401(k) and other health and welfare plans. An independent third party
reviewed and approved the continuing relationships between American Beacon and
American Airlines pension, 401(k) and other health and welfare plans to
satisfy the fiduciary duties and other rules that apply to these plans.
In addition to providing investment management services to AMR, American
Beacon serves as the investment manager of the American Beacon Funds, a family
of mutual funds with both institutional and retail shareholders. Shareholders
of the American Beacon family of mutual funds voted to approve American
Beacon's continued appointment as the investment manager for the mutual funds.
"Pharos and TPG believe that the asset management business is a robust
sector, in which American Beacon is a strong leader with an outstanding,
20-year track record of performance in multiple-asset classes across a variety
of investment cycles," said Kneeland Youngblood, co-founder and managing
partner of Pharos Capital. "We look forward to working with the American
Beacon team and TPG to fully leverage its strengths into an industry-leading
firm. And, we welcome the opportunity to work with AMR not only as a
significant client, but as a long-term partner."
"Having significantly grown our third-party revenue over the past several
years, we believe the timing of the divestiture is just right for our company,
our customers and our employees," said American Beacon Advisors Chairman
William F. Quinn. "We're looking forward to focusing on growing our core
business, while continuing to serve the needs of our customers and building on
our successful history under a new ownership structure. Our management team
and employees are excited about the many opportunities that this transaction
will present to American Beacon, and our customers can rest assured that we
intend to provide the same high level of service and expertise that they have
come to expect from American Beacon in the past."
About AMR Corporation
AMR is the parent company of American Airlines and American Eagle
Airlines. American Airlines is the world's largest airline. American,
American Eagle and the AmericanConnection(R) airlines serve 250 cities in 40
countries with more than 4,000 daily flights. The combined network fleet
numbers more than 1,000 aircraft. American's award-winning Web site, AA.com,
provides users with easy access to check and book fares, plus personalized
news, information and travel offers. American Airlines is a founding member
of the oneworld(R) Alliance, which brings together some of the best and
biggest names in the airline business, enabling them to offer their customers
more services and benefits than any airline can provide on its own. Together,
its members serve nearly 700 destinations in over 140 countries and
territories. American Airlines, American Eagle, the AmericanConnection(R)
airlines, AA.com, We know why you fly and AAdvantage are registered trademarks
of American Airlines, Inc. (NYSE: AMR)
About American Beacon Advisors, Inc.
American Beacon Advisors, Inc. is an experienced provider of investment
advisory services to institutional and retail markets. American Beacon
Advisors serves defined benefit plans, defined contribution plans,
foundations, endowments, corporations and other institutional investors.
American Beacon Advisors acts as an investment advisor and/or manager for
certain pension and short-term cash assets of American Airlines. American
Beacon Advisors also manages the American Beacon Funds, a series of low-cost,
no-load mutual funds open to institutional investors, retirement accounts such
as IRAs and individual investors. The Fund family currently includes several
portfolios spanning a variety of longer-range investments from international
and domestic equity through balanced portfolios. They also include short-term
investment options including bond funds and money market funds.
About Pharos Capital Group, LLC
A private equity firm based in Dallas and Nashville, Pharos Capital Group
invests through three private equity funds. Pharos maintains a broad and
diverse limited partner base comprised of public, private and Taft-Hartley
plans. Pharos primarily invests in companies seeking later-stage equity
funding for internal growth, acquisitions, management buyouts or
recapitalizations across industry sectors, with particular focus on health
care, business services (including financial services), and applied
technology. To learn more about Pharos Capital Group, LLC, please visit
About TPG Capital
TPG Capital is the global buyout group of TPG, a leading private
investment firm founded in 1992 with more than $55 billion of assets under
management and offices in San Francisco, London, Hong Kong, New York, Fort
Worth, Menlo Park, Washington, D.C., Melbourne, Moscow, Mumbai, Paris,
Luxembourg, Beijing, Shanghai, Singapore and Tokyo. TPG Capital has extensive
experience with global public and private investments executed through
leveraged buyouts, recapitalizations, spinouts, joint ventures and
restructurings. Please visit http://www.tpg.com.