For $2.6B, Harbor's Parent Finally Sells
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Friday, February 22, 2013

For $2.6B, Harbor's Parent Finally Sells

Harbor Funds' parent finally found a buyer. Yet the mutual fund shop doesn't expect its new masters to rock the boat much.

The Japanese financial services giant Orix Corp recently signed a deal to buy 90.01 percent of the Robeco Group from the Dutch banking conglomerate Rabobank for $2.6 billion. Watch for the deal to close in six months or so.

Rabobank had been shopping for a buyer for the asset management unit for at least a year, generating a number of potential suitors last fall.

Rabobank will retain 9.99 percent ownership in the asset manager. The $2.6-billion price tag for the remaining 90.01 percent chunk of Robeco values the asset manager at 1.16 percent of its $249 billion in assets under management.

Robeco Group is the parent of a number of players within the United States mutual fund market, including Harbor Capital Advisors, Robeco Investment Management, Robeco Investments, RobecoSAM, and Transtrend.

Manager of managers Harbor has roughly $69 billion in assets under and markets nearly 30 funds in the United States, including a bond fund powered by Pimco superstar Bill Gross.

Meanwhile, Robeco Investment Management manages at least 12 funds, has over $30 billion in AUM and has three separate brands: Boston Partners (value equity), Sage Capital (multi-manager strategies), and Weiss, Peck & Greer (fixed income, equity and alternatives).

Rounding out the lineup: RobecoSAM does sustainable investing, managing at least eight funds. Transtrend is into alternatives, including managed futures funds.

In a statement, Harbor had this to say about the impact the acquisition would have on its operations:
Based on what we know today, this transaction should not have any effect on Harbor Capital Advisors or Harbor Funds. All Harbor funds will continue with the same subadvisers and be managed just as they are today.

Harbor Capital Advisors has been owned by Robeco for almost twelve years. During Robeco's ownership, Harbor Capital Advisors has operated as an independent subsidiary of Robeco and will continue to do so. ORIX and Robeco have indicated that they expect Harbor Capital Advisors to continue to operate without any changes in governance, people or business activities. Harbor Capital Advisors will continue its focus on acting in the best interests of Harbor Funds shareholders.

The trustees of Harbor Funds will perform due diligence on ORIX and must approve new advisory and subadvisory agreements for Harbor Capital Advisors and Harbor Funds that will take effect if the transaction is completed. The shareholders in Harbor Funds will then be given the opportunity to vote on the new advisory agreements through a proxy solicitation that will describe the transaction in greater detail. These two approval steps are important safeguards for Harbor Funds shareholders.

There may be further U.S. deals for Orix in the near future. According to a statement, "ORIX will pursue further expansion in Europe and the U.S, as well as growth in Asia and Middle East regions where it has a strong platform.

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