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Rating:Bells Ring for Ameriprise and Columbia Not Rated 0.0 Email Routing List Email & Route  Print Print
Monday, May 03, 2010

Bells Ring for Ameriprise and Columbia

Reported by Armie Margaret Lee

Ameriprise finished its $1 billion acquisition of Columbia Management's long-term asset management business from Bank of America on May 1. The deal makes Ameriprise the eighth largest manager of long-term mutual fund assets.

Ameriprise will merge its U.S. asset management business, RiverSource Investments, with Columbia Management's non-money market business under the Columbia moniker. Ameriprise is keeping the RiverSource brand for annuity and life, health and disability insurance products.

As previously reported, Ted Truscott, CEO of US asset management and president of annuities, will continue to run the asset management business. Mike Jones will continue as president of Columbia Management and Colin Moore will remain chief investment officer. Both report to Trusott.

"We really see an opportunity here for expanding our distribution through our agreement with Bank of America and other external platforms," Jones was quoted in a Wall Street Journal article as saying.

In an interview with Amerprise's hometown paper, The Star-Tribune, Jones said of the deal: "It's a fit that makes a lot of sense in terms of where this industry's going."
Company Press Release

MINNEAPOLIS – May 3, 2010 –Ameriprise Financial, Inc. (NYSE: AMP) today announced that it has completed the acquisition of the long-term asset management business of Columbia Management from Bank of America for approximately $1 billion in cash.

As of March 31 data, the acquisition adds $189 billion in assets and establishes the company as the eighth largest manager of long-term mutual fund assets in the U.S. Ameriprise Financial now has $652 billion in total owned, managed and administered assets.

In addition to enhancing equity and fixed income retail and institutional capabilities, the transaction includes a five-year strategic distribution agreement that provides ongoing access to clients of Bank of America affiliated distributors, including U.S. Trust.

“The Columbia Management acquisition transforms our asset management capabilities and provides a platform to accelerate our growth,” said Jim Cracchiolo, chairman and chief executive officer of Ameriprise Financial. “It enhances our scale, broadens our distribution and strengthens and diversifies our lineup of strong performing retail and institutional funds. Importantly, the transaction allows us to capture essential expense synergies that will be instrumental in driving improved asset management returns and margins over time.”

"Since the transaction was announced in September, both RiverSource Investments and Columbia Management employees have been focused on serving clients and advisors and maintaining business momentum. We are grateful for their efforts and look forward to growing this business together."

Ameriprise Financial will combine its current U.S. asset management business, RiverSource Investments, with Columbia Management under the Columbia brand. Threadneedle Investments remains the company's international investment platform. The RiverSource brand will continue for the company's annuity and life, health and disability insurance products.

The U.S. asset management business will continue to be led by William F. "Ted" Truscott, CEO, U.S. Asset Management & President, Annuities. Michael A. Jones will continue to serve as President of Columbia Management and Colin Moore will continue to serve as Chief Investment Officer. Messrs. Moore and Jones will report to Mr. Truscott.

"We're energized by the opportunities this transaction gives us," Mr. Truscott said. "We have assembled a team of extraordinarily talented investment professionals, and we now offer clients strong-performing funds in every style category. We believe this combined organization is poised to deliver a very compelling value proposition."

The transaction is expected to be accretive to the company’s earnings and return on equity within one year, excluding integration costs. Ameriprise Financial continues to maintain more than $1.5 billion of excess capital and a strong liquidity position.
 

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