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Rating:Touchstone Sells Two Funds To A Natural Buyer Not Rated 0.0 Email Routing List Email & Route  Print Print
Friday, May 29, 2009

Touchstone Sells Two Funds To A Natural Buyer

Reported by Meredith Mazzilli

Federated Investors continues its buying spree by inking a deal to buy two funds whose sub-advisor Federated already owns. On Friday, the Pittsburgh-based asset manager unveiled plans to acquire the approximately $233 million in assets from Touchstone Advisors' Value Opportunities Fund and Diversified Small Cap Value Fund.

A spokeswoman for Federated confirmed that the fund firm did not use an outside banker for the deal. Spokespeople for Touchstone could not immediately be reached for comment.

The Value Opportunities fund will be folded into the brand new Federated Clover Value Fund, and the Diversified Small Cap Value Fund will merge with the brand new Federated Clover Small Value Fund (see MFWire, 3/16/2009). Last month a third Clover-sub-advised Touchstone fund, Touchstone Clover Core Fixed Income, hired a new sub-advisor, JKMilne Asset Management (see MFWire, 4/24/2009).

This fund reorganization follows Federated's 2008 acquisition of certain assets of Clover Capital Management. Jill McGrunder, Touchstone president noted "The reorganizations 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."

Federated purchased a majority of the assets of Clover in late 2008. (See The MFWire , September 15, 2008) Clover sub-advised the Touchstone funds since their relative inception dates.

The changes are anticipated to go into effect as soon as the Federated board of trustees approves the proposed reorganizations at a meeting to be held August 2009.

Federated has been acquisition-hungry for some time. Bloomberg recently named Federated as one of several bidders vying for Columbia Management (see MFWire, 5/11/2009). And Federated has done a number of deals since the beginning of 2008 alone, including:

  • buying the CB Core Equity Fund from Central Bank and Trust Company;

  • buying the Prudent Bear Fund and the Prudent Global Income Fund from David W. Tice & Associates;

  • folding the Putnam Prime Market Fund into its Federated Prime Obligations Fund;

  • and signing on as sub-advisor for the Nationwide Money Market Fund, the NVIT Money Market Fund and the NVIT Money Market Fund II.

    (See MFWire, 5/12/2008, 7/15/2008, 7/15/2008, 9/24/2008, 12/10/2008, and 4/29/2009.) 

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