Toronto-based Foresters Financial has agreed to sell its First Investors mutual funds to Macquarie Investment Management and its advisory business to Cetera Financial Group, the companies announced.
Macquarie manages the Delaware Funds. Cetera is the second-largest family of independent broker-dealers in the United States.
First Investors has about $12.3 billion in assets under management, while Foresters’ U.S. broker-dealer and advisory business has $12 billion in client assets under management, bringing a total of almost $25 billion in AUM to the deal.
The sale of First Investors to Macquarie, subject to regulatory and fund shareholder approvals, is expected to close by the end of 2019, while the deal with Cetera is expected to close late in the second quarter of 2019, Foresters said.
According to Jim Boyle, president and CEO of Foresters, the acquisition agreements will enable his company to focus on and invest in its core life insurance business, started in 1874. Foresters serves the insurance needs of a about 39 million households in the U.S., but also does business in Canada and the United Kingdom, according to the company.
Macquarie Investment Management, headquartered in Philadelphia, will manage segments of Forester’s general account, while Cetera, headquartered in El Segundo, Calif., will have a distribution relationship with Foresters.
As part of the asset purchase agreement, Cetera will be permitted to invite Foresters’ about 500 independent financial advisors to join Cetera’s self-clearing platform. In addition, Cetera will have the option to assume the leases of more than 40 branch office locations that Foresters owns throughout the United States, according to the press release.
Sean Casey, reporting to LeAnn Rummel, president of Cetera Investment Services, will lead the management team formed to oversee the new division. Cetera will establish a dedicated service and support team to conduct a seamless transition for the newly affiliated Cetera advisors.
According to Rummel, Foresters chose Cetera as the firm best suited to acquire its assets based on Cetera’s product solutions and proven track record of helping advisors grow their business.
Adam Antoniades, president of Cetera, said that Foresters Financial advisors had a long-standing and growing client base of colleges and universities with high retention, making the deal attractive for Cetera as well as Foresters.