Natixis Investment Managers affiliates, Loomis Sayles and McDonnell Investment Management, have closed a deal to merge the two businesses.
The deal will see McDonnell IM, which specialises in municipal and taxable bond strategies, integrated into Loomis Sayles in January 2019.
A statement from Natixis IM said the move will allow McDonnell, which has $11.7bn (£9.1bn) assets under management, to benefit from Loomis Sayles’ investing, research and operational capabilities.
Normality or pointless?
Darius McDermott, managing director at Chelsea Financial Services, said bringing these companies together makes sense.
He said: “It is of course continuing evidence of consolidation within asset management and a trend we think is likely to continue.”
Ryan Hughes, head of active portfolios at AJ Bell, said there is always the potential for mergers to occur in the underlying managers when a company operates an affiliate structure.
He added: “There are synergies to be had in overlapping areas and it is clear from the communication from Loomis and McDonnell that there are operational advantages to combining both businesses. This should ultimately enable fund managers to focus on managing money while creating the scope to reduce costs across the wider businesses.”
However, Jason Hollands, managing director at Tilney, said the investment capability overlap between these two business is minimal meaning the merger is essentially about achieving operational efficiencies.
“McDonnell doesn’t operate in the UK and the key Loomis Sayle fund distributed in the UK is its excellent US Equity Leaders fund, which is on our buy list,” he added. “I can’t see this having any impact on the fund whatsoever.”
Smooth transition
Following the integration, the municipal portfolio management team will remain intact and will continue to operate from the Illinois office.
The management of McDonnell IM’s core and taxable fixed income strategies will be moved later next year to the Loomis Sayles Relative Return team.
The firm said to ensure continuity for clients, chief executive and chief investment officer of McDonnell IM, Mark Giura, will lead the office and support existing client relationships, while managing the integration process.
Jean Raby, CEO of Natixis Investment Managers, said: “We fully support the decision by Loomis Sayles and McDonnell Investment Management to join forces.
“The combination of this pair of our investment affiliates further enhances our fixed income offering and unlocks natural synergies that will benefit the clients of both firms.”
Kevin Charleston, chief executive of Loomis Sayles, added: “We believe we can bring significant operational support to the McDonnell municipal investing effort, and free up the portfolio management team to focus on generating alpha.
“We also believe municipal investing is important to our clients, and we are pleased to expand our capabilities in that area.”
Natixis Investment Managers will transfer ownership of McDonnell IM to Loomis Sayles on 1 January.
