Foresters Sells Money Manager, Keeps Life Business

The Independent Order of Foresters today announced plans to sell its U.S. asset-management and broker-dealer businesses and focus more tightly on its core life insurance operations.

The Toronto-based fraternal insurer says it intends to focus on increasing sales of life insurance to mass-market and middle-market consumers in Canada, the United States and the United Kingdom.

Macquarie Group Ltd. — a financial services company based in Sydney, in the Australian state of New South Wales — has agreed to acquire Foresters’ First Investors mutual fund family. The First Investors funds are managing about $12 billion in investor assets.

Cetera Financial Group Inc. — a financial services distributor based in El Segundo, California — has agreed to acquire Foresters’ U.S. broker-dealer and advisory business, which has about 40 offices and relationships with about 500 financial professionals.

Foresters and Macquarie have not said how much Macquarie expects to pay for First Investors, and Foresters and Cetera have not said how much Cetera expects to pay for the Foresters U.S. distribution business.

Foresters said it hopes to complete both deals by Dec. 31.

Foresters

Foresters was founded in 1874. It reported the equivalent of an $88 million net loss for 2018 on $1.1 billion in revenue, due in part to an $80 million drop in net investment gains and a $350 million unrealized loss on the fair value of its investments.

Net unrealized foreign currency translation gains helped cut the company’s total comprehensive loss to $7.4 million.

The company ended 2018 with about $13 billion in assets of its own.

Foresters has worked with a KaBOOM!, a nonprofit organization that builds playgrounds, to build about 150 playgrounds and playspaces in 86 cities in North America.

First Investors

Foresters acquired First Investors Consolidated Corp. in early 2011, after announcing the deal in September 2010.

Foresters acquired the New York-based company’s broker-dealer, registered investment advisory firm, transfer agent operations and life insurance operations as well as the mutual fund operations.

First Investors then had $7 billion in assets under management, and a network of about 700 sales professionals and 400 employees in 46 offices.

Macquarie

Macquarie is the company that acquired Delaware Investments from Lincoln Financial Group in 2009.

Macquarie ended 2018 with $234.5 billion in U.S. investor funds under management, and a total of $375 billion in investor funds under management.

Macquarie itself generated about $1.2 billion in fee and commission revenue from annuity-type products in 2018, according to the company’s financial tables for 2018.