Guggenheim Partners is exploring the sale of a stake in its $250 billion asset-management unit overseen by Scott Minerd, according to people familiar with the matter.
Guggenheim Partners Investment Management has been in talks with global insurers, sovereign wealth funds and investment pools in Europe, the Middle East and Asia, the people said. The Wall Street Journal reported Wednesday that the deal could involve Guggenheim taking on German insurer Munich Re’s asset management unit.
Discussions are in early stages and it’s possible that no deal is reached, the people said. The firm’s largest investors have been in talks about the strategic options, the people said.
“Guggenheim listens to people who propose acquisitions of stakes from time to time,” Mike Sitrick, an outside spokesman for Guggenheim, said in an email. He declined to comment further. A spokesman for Munich Re declined to comment.
Minerd, 59, is seeking to strengthen his division, which mostly oversees money from insurers, by diversifying the investment base, which is more than 90 percent from U.S. investors. More than half of Guggenheim’s assets under management were from insurance companies, including several Guggenheim affiliates and Sammons Enterprises Inc., its biggest shareholder, Minerd said at a June 6 insurance industry conference in New York.
While insurance firms and asset managers have long histories of cross ownership, they also face conflicts, such as differing investing strategies, Minerd said this month at the conference. The best outcomes occur when insurers -- or other investors -- buy minority stakes in asset managers, he said.
A deal with Munich Re’s asset management business “could make sense, you may have some cost savings,” said Michael Haid, an analyst at Commerzbank. “On the other hand, insurers do not generally like to give up control over their investments. It’s part of the value chain and so any transaction would have to be structured in a sensible way” to avoid conflicts of interest as Guggenheim manages other insurers’ assets.
Munich Re shares fell 1 percent at 10:48 a.m. in Frankfurt trading. The stock is down 1.1 percent this year.
Recent insurance and asset-manager tie-ups include Nippon Life Insurance Co.’s acquisition of a 25 percent stake in TCW Group Inc. for about $490 million and MetLife Inc.’s acquisition of Logan Circle Partners from Fortress Investment Group LLC, both last year. In 2014, TIAA purchased Nuveen Investments for about $6 billion.
In April, Guggenheim completed the sale to Invesco Ltd. of 77 exchange traded funds for $1.2 billion. That transaction was led by Jerry Miller, who was hired last year as president of Guggenheim Investments from Deutsche Bank AG.