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Rating:Nationwide's Spangler Unveils a $3.6B Mutual Fund Deal Not Rated 0.0 Email Routing List Email & Route  Print Print
Wednesday, April 3, 2013

Nationwide's Spangler Unveils a $3.6B Mutual Fund Deal

Reported by Neil Anderson, Managing Editor

Union Bank is selling the HighMark equity and bond mutual fund business to Nationwide [profile].

Reuters previously reported that Union Bank is splitting up the HighMark mutual fund business, selling the non-money market business to Nationwide and the money funds to Reich & Tang. Now Nationwide has officially announced the deal.

The deal will bring 17 equity and bond mutual funds holding about $3.6 billion into the Nationwide fold, pushing its asset under management to about $51 billion. HighMark Capital Management, with $15 billion in AUM, will stay put under Union Bank and will sub-advise nine of the mutual funds (well, the funds' successors). Meanwhile, the other eight are handled by Bailard, Geneva Capital Management and Ziegler Lotsoff Capital Management, and Nationwide expects to keep that trio on, too.

Cambridge International Partners advised Nationwide on the deal, and Stradly Ronon Stevens & Young served as legal counsel. Berkshire Capital Securities advised HighMark and Union Bank, and Bingham McCutchen served as legal advisor.

This deal was announced on the same day Union Bank sold HighMark's money market mutual fund business to Reich & Tang [profile].

Company Press Release

Nationwide Financial agrees to acquire 17 funds with $3.6B in assets from HighMark Capital

New funds expand array of investment strategies available to meet the evolving needs of advisors and their clients

COLUMBUS, Ohio – Nationwide Financial today announced it has entered into an agreement with HighMark Capital Management, Inc., to acquire 17 equity and bond mutual funds. The transaction is expected to provide Nationwide Financial’s mutual fund business with approximately $3.6 billion1 in new assets and enables Nationwide to offer a wider array of investment offerings to financial advisors and their clients. Terms of the deal are not being disclosed.

“This transaction is the latest step in our journey to significantly grow and expand our mutual fund business and position Nationwide for long-term success,” said Kirt Walker, president and chief operating officer of Nationwide Financial.

“Through this transaction, Nationwide continues to expand the breadth and depth of its product portfolio to provide financial advisors with as many solid, long-term investment options as possible,” added Michael Spangler, president of Nationwide Funds. “We look forward to working with HighMark to expand the distribution of these funds and provide current shareholders with immediate benefits.”

HighMark Capital Management, a wholly owned subsidiary of Union Bank, N.A., is the investment adviser to the HighMark Funds, a nationally recognized fund company offering a wide range of mutual funds that utilize a disciplined investment process with the goal to deliver over the long term.

HighMark Capital Management will become the subadviser for the successors to the nine funds that it currently manages in the form of nine new Nationwide Funds. In addition to HighMark Capital Management, eight of the 17 mutual funds are subadvised by three other asset managers: Bailard, Inc., Geneva Capital Management Ltd, and Ziegler Lotsoff Capital Management, LLC. Nationwide plans to continue those relationships as well.

“Since their inception, HighMark Funds have achieved strong performance and analyst acknowledgement over the years,” said Dennis Mooradian, president of HighMark Capital Management and executive vice president of Union Bank. “Nationwide has extensive distribution capabilities and a widely recognized brand that will enhance and extend the distribution of our funds. We are pleased to be partnering with an organization that shares our values of quality service and long-term relationships.”

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 $15 billion in client assets.

“This agreement with Nationwide 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 added.

The transaction, which has been approved by the boards of trustees of both mutual fund complexes, is expected to close by the end of the third quarter, pending the customary regulatory and shareholder approvals. Upon completion of the transaction, Nationwide Financial’s mutual fund business is expected to have approximately $51 billion in net assets under management.

Nationwide Financial has engaged Cambridge International Partners Inc. as its financial advisor and Stradley Ronon Stevens & Young, LLP as its legal counsel. Berkshire Capital Securities LLC acted as the financial advisor and Bingham McCutchen LLP as the legal advisor for HighMark Capital Management and Union Bank.

Investors interested in learning more about Nationwide Funds should contact their financial professional or visit the Nationwide Funds website.

About Nationwide
Nationwide Mutual Insurance Company, based in Columbus, Ohio, is one of the largest and strongest diversified insurance and financial services organizations in the U.S. and is rated A+ by both A.M. Best and Standard & Poor’s. The company provides customers a full range of insurance and financial services, including auto insurance, motorcycle, boat, homeowners, pet, life insurance, farm, commercial insurance, annuities, mortgages, mutual funds, pensions, long-term savings plans and specialty health services. For more information, visit www.nationwide.com.

About Nationwide Funds
Based in the Philadelphia area, Nationwide Funds is the mutual fund business of Nationwide Financial Services Inc., a leading provider of long-term savings and retirement products and a Nationwide Insurance company. A strategic partner to advisors, Nationwide Funds provides a full family of sub-advised mutual funds designed to help meet the unique investment goals and risk tolerances of their investor clients. Nationwide Funds is comprised of Nationwide Fund Advisors, Nationwide Fund Distributors LLC and Nationwide Fund Management LLC. Together they provide advisory, distribution and administration services, respectively, to Nationwide Funds. As of Dec. 31, 2012, Nationwide Funds manages 91 funds with approximately $45 billion in assets, exclusive of fund of funds.

About HighMark Capital Management, Inc.
San Francisco-based HighMark Capital Management, Inc. (HCM), is a registered investment adviser, with more than $18 billion in assets at December 31, 2012, for individual and institutional investors worldwide.

HCM is a wholly-owned subsidiary of Union Bank, N.A. Union Bank, N.A. is wholly owned by UnionBanCal Corporation. UnionBanCal Corporation is wholly-owned by The Bank of Tokyo-Mitsubishi UFJ, Ltd., which is a wholly-owned subsidiary of Mitsubishi UFJ Financial Group, Inc. (MUFG, NYSE:MTU), one of the world’s largest financial organizations in market capitalization and deposit taking.

HCM is also the adviser to the HighMark Funds, a nationally recognized fund company offering a wide range of mutual funds including world class fixed income funds, domestic and international equity funds, conservatively managed money market funds and asset allocation portfolios. HighMark Funds Distributors, LLC, an affiliate of Foreside Funds Distributors LLC, is the principal underwriter of the HighMark Funds. NO BANK GUARANTEE, NOT FDIC INSURED, MAY LOSE VALUE. There is no guarantee that the Funds will meet their stated objectives.

For more information on HighMark Fund’s family of mutual funds and services, please visit www.highmarkfunds.com. HighMark Capital Management can be found on the Web at www.highmarkcapital.com.

Mutual fund investing involves risk, including possible loss of principal. Investors should consider the Funds’ investment objectives, risks, charges and expenses carefully before investing. This and other information can be found in the Funds’ prospectus, which may be obtained by calling 800-433-6884, or by visiting www.highmarkfunds.com. Please read the prospectus carefully before investing.

Nationwide, Nationwide Financial, Nationwide Funds Group, the Nationwide framemark and “On Your Side” are service marks of Nationwide Mutual Insurance Company.

Investing in mutual funds involves risk, including the possible loss of principal. Investors’ shares, when redeemed, may be worth more or less than their original cost.

Investors should carefully consider a fund’s investment objectives, risks, fees, charges and expenses before investing any money. To obtain this and other information on Nationwide Funds Group, please call 1-800-848-0920 to request a summary prospectus and/or a prospectus, or download a summary prospectus and/or a prospectus at nationwide.com/mutualfunds. Please read it carefully before investing any money.

Nationwide Funds is distributed by Nationwide Fund Distributors LLC (NFD), Member FINRA, King of Prussia, Pa.

1Assets as of December 31, 2012.

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