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Portfolio > Alternative Investments > Hedge Funds

Zurich Sells Threadneedle to American Express

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LONDON (–American Express Financial Corp. agreed to buy Threadneedle Asset Management Holdings Ltd. from Zurich Financial Services Group for US$570 million in cash.

Threadneedle, a manager of US$1.1 billion in hedge funds and US$75 billion overall, will not change its operations as a result of the shift in ownership and will continue to manage assets for Zurich for up to eight years under terms of the agreement, according to a company statement on the sale. The deal is subject to regulatory approval and is expected to close in the fourth quarter.

The sale by Zurich is another move in its efforts to focus on its core businesses in insurance. A Zurich spokeswoman declined comment on any future plans for hedge fund and structured product manager Zurich Capital Markets, which has been the subject to sale rumors, on and off, for several months.

Threadneedle’s chief executive, Simon Davies, will remain with the company and will report to Jim Cracchiolo, group president of global financial services and chairman and chief executive of American Express Financial Advisors, Minneapolis.

Threadneedle currently manages three hedge funds under the Crescendo brand, a European equity long/short fund, a U.K equity long/short fund and a credit fund, which was launched earlier this year Previous HedgeWorld Story.

American Express bought the company to help it expand its business globally, according to a statement from the firm. The firm has seen defections from its own hedge fund business in recent months. Most recently, Kenneth Stemme left Amex as a managing director and co-manager of six hedge funds to join Northern Trust Global Advisors, Stamford, Conn., in May Previous HedgeWorld Story. American Express also is working to offer a hedge fund that is registered with the Securities and Exchange Commission Previous HedgeWorld Story.

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