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Guggenheim's CEO Is Said to Seek Control of Insurer in Shake-Up

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Mark Walter, the billionaire chief executive of Guggenheim Partners, is in discussions to take control of one of the firm’s insurance units as the $290 billion company fractures, according to people with knowledge of the plans.

Walter, 57, is taking steps to remove insurer Guggenheim Life and Annuity Co. and fold it into his Delaware Life Insurance Co., which was rebranded this month as Group One Thousand One, said the people, who asked not to be named because the information is private. The CEO also is working to form a holding company to oversee his personal assets including the insurance firms, the Los Angeles Dodgers baseball franchise and other businesses he controls, according to two of the people.

(Related: Invesco in Talks to Buy Guggenheim ETFs: Reports)

The negotiations may end with Walter stepping away from day-to-day management of Guggenheim, which he co-founded in 2000, the people said. The timing of Walter’s possible departure, terms of the separation and remaining management structure are all under discussion at the firm’s headquarters in Chicago and New York, said the people.

Walter has no present intention to leave as CEO, according to another person familiar with his plans.

Guggenheim may also close a deal to sell its exchange-traded funds business to money manager Invesco Ltd. within a month, according to people familiar with the matter, which would mark another shift in the makeup of the company.

A spokesman for Guggenheim at Sitrick & Co. declined to comment. Heather Kreager, a Guggenheim board member representing Sammons Enterprises Inc., which controls 35% of Guggenheim, has not discussed Walter’s departure with the board, according to a Sammons spokeswoman.

Though its name dates to a 19th-century fortune, Guggenheim wasn’t formed until 2000 when the family office of descendants of mining baron Meyer Guggenheim merged with Walter’s firm, Liberty Hampshire. Closely held Guggenheim has investment banking, asset management and insurance divisions.

Walter, a former banker with First Chicago, founded Liberty Hampshire in 1996 as a securitization specialist, recruiting Scott Minerd two years later to run asset management. Alan Schwartz, who joined Guggenheim in 2009 after serving as the last CEO of Bear Stearns Cos., heads the investment-banking division that runs merger and acquisition deals, debt origination and other advisory services.

The firm has experienced turbulence this year amid news reports of tensions between Walter and Chief Investment Officer Minerd over last year’s promotion of Alexandra Court to oversee global distribution for the investment management unit, which manages $237 billion as of June 30. Sitrick has denied a conflict between Walter and Minerd.

—With assistance from Sonali Basak and Scott Soshnick.

— Read Guggenheim Launches Multi-Factor Large-Cap ETF: Portfolio Products on ThinkAdvisor.

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