(Bloomberg News) Hartford Financial Services Group Inc. is seeking buyers for its mutual-fund unit, which may fetch $1.5 billion or more, said four people with knowledge of the matter.
Hartford has contacted companies with rival asset- management operations as well as private-equity investors, said the people, who spoke on condition of anonymity. Hartford's mutual-fund business had about $104 billion of assets under management at the end of the first quarter, according to a regulatory filing.
Chief Executive Officer Liam McGee, hired in 2009 to restore profit and guide the company out of a U.S. bailout, reorganized the life insurance and savings business that helped push Hartford into more than $4 billion of losses during the financial crisis. He scaled back reliance on savings products called variable annuities and refocused the company on the U.S.
McGee, 56, grouped the company's mutual fund, life insurance, annuity and retirement plan businesses under a Wealth Management division. David Levenson was promoted in July to president of Wealth Management, reporting to McGee.
Hartford declined 4 cents to $27.56 yesterday on the New York Stock Exchange and has gained 4 percent this year.
Hartford boosted profit last year by selling a Canadian mutual-fund business and a third-party claims-administration operation. Net income was $1.68 billion last year after a loss of $887 million in 2009. The net loss was $2.75 billion in 2008.
Hartford, based in the Connecticut city of the same name, is using bankers at Goldman Sachs Group Inc. and UBS AG to handle the potential sale, the people said. Shannon Lapierre, a Hartford spokeswoman, declined to comment, as did Andrea Rachman of Goldman Sachs and Torie von Alt of UBS.
The mutual-fund unit had net income of $132 million in 2010, according to a regulatory filing. Hartford entrusts management of a portion of its mutual funds to Wellington Management Co. The insurer manages some of the funds through its investment-management division.