Natixis Merges an $11.7B AUM Shop Into Loomis
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Friday, November 16, 2018

Natixis Merges an $11.7B AUM Shop Into Loomis

Jean Raby is about to combine two Natixis [profile] boutiques with about $279 billion in total AUM.

Jean Raby
Natixis Investment Managers
Yesterday Raby, CEO of Natixis Investment Managers, confirmed that early next year Oakbrook Terrace, Illinois-based McDonnell Investment Management, LLC (founded in 2001 and acquired by Natixis back in 2012) will merge into Boston-based Loomis, Sayles & Company [profile]. As of September 30, Loomis Sayles had $267.3 billion in AUM and McDonnell had $11.7 billion in AUM.

Kevin Patrick Charleston
Loomis Sayles & Co. LP
Chairman, CEO, President
The pricing and terms of the deal were not disclosed. The plan is for Natixis to pass ownership of McDonnell to Loomis on January 1, 2019.

Loomis Sayles doesn't currently offer any municipal fixed income strategies, so unsurprisingly McDonnell's municipal PM team (which runs about $6.9 billion in AUM) will stay on in the Oakbrook Terrace office (outside Chicago). Yet Loomis Sayles' relative return team will take over PM duties on McDonnell's core (taxable) fixed income strategies (about $3.81 billion). McDonnell also has $940 million in fixed income strategies that crossover between core and muni investments.

Mark Joseph Giura
McDonnell Investment Management, LLC
CEO, Chief Investment Officer
Mark Giura, CEO and chief investment officer of McDonnell, will stay on to manage the integration process, lead the Oakbrook Terrace office, and maintain client relationships.

"We believe we can bring significant operational support to the McDonnell municipal investing effort, and free up the portfolio management eam to focus on generating alpha," states Kevin Charleston, CEO of Loomis Sayles. "We also believe municipal investing is important to our clients, and we are pleased to expand our capabilities in that area."

Raby states that the deal "further enhances [Natixis'] fixed income offering and unlocks natural synergies." Giura elaborates:

"This integration provides McDonnell clients access to investments backed by Loomis Sayles' extensive research and technology resources, and supplies Loomis Sayles with key strategic municipal capabilities and additional expertise to serve the insurance market," Giura states.

In terms of distribution, the deal could bring McDonnell's strategies into the mutual fund business. For Loomis, 40 percent of its AUM is in U.S. mutual funds, 36 percent is in U.S. separate accounts (mostly for institutional clients), and the rest is for non-U.S. clients. As for McDonnell 50 percent of its AUM is in separately managed accounts for private clients, 35 percent is for corporate clients (namely, insurance companies), 10 percent is for retirement plans, four percent is for the foundations and healthcare channel, and one percent is in sub-advised funds.

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