MutualFundWire.com: This Is What Drove the Deal For American Century

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Monday, December 28, 2015

This Is What Drove the Deal For American Century

A key factor behind the American Century-CIBC-Nomura [profile] deal is new distribution opportunities.

Michael Green
American Century
Chief Executive Officer, International

Last week Japanese multi-national Nomura unveiled a $1-billion deal to buy CIBC's 41-percent stake in American Century. Michael Green, senior vice president of global client relationships at American Century, talked with MFWire about the deal, which is slated to close within the first half of 2016.

London-based Green says that the deal could boost Kansas City, Missouri-based American Century's retail distribution outside of the U.S. And for Nomura, the deal offers new investment strategies and strengths to offer through its existing distribution networks in Japan and Asia.

American Century's international business dates back to 2008, when Green joined as its first outside-the-U.S. employee. Though American Century does significant retail and advisor distribution in the U.S., "outside the U.S. it's almost entirely an institutional business," Green says. American Century now has about $12.5 billion in international business, "overwhelming in separate accounts," Green says, and mostly in global and emerging market equity strategies.

CIBC bought its American Century stake four years ago. When CIBC decided to sell the stake, Green says, the American Century folks "were looking for a few things" in a buyer: someone that's ok being a monetary owner while letting American Century stay independent; someone that's a good "cultural fit"; and someone that has an asset management business that doesn't overlap much with American Century. Nomura, with its focus on Asia and Japan, fit all three.

"CIBC essentially gave us the opportunity to find a partner to replace them that they would like," Green says.

Green expects the biggest impact of the deal, for American Century, to be in Japan. And he says that American Century will look at bringing Nomura's strategies to U.S. investors.

"We haven't had the time to study what they really have yet," Green says, adding that there are "very few overlaps" between American Century's and Nomura's offerings. "From a client type point of view, it might make sense to look at a mutual fund shape."

Printed from: MFWire.com/story.asp?s=53183

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