Pendal Group, Parent Company Of J O Hambro Capital Management, Doubles U.S. Assets With Acquisition Of Virginia-Based Value Manager Thompson, Siegel & Walmsley LLC; John Reifsnider Named CEO Of Pendal USA

Rhea-AI Summary

Pendal Group has announced its acquisition of Thompson, Siegel & Walmsley LLC for $320 million. This strategic move will more than double Pendal's U.S. assets under management from $21.1 billion to $44.7 billion. TSW, a Virginia-based investment manager, manages $23.6 billion in assets and is known for its strong performance. The acquisition aligns with Pendal's growth strategy and will enhance its product offerings and client solutions. TSW's CEO, John Reifsnider, will lead the combined U.S. business.

Positive

• Acquisition increases Pendal's U.S. AUM from $21.1 billion to $44.7 billion.
• TSW's strong performance and 4-5 star rated funds enhance Pendal's capabilities.
• No planned staff reductions; TSW team fully supportive of the acquisition.
• Cultural fit and shared investment autonomy philosophy between TSW and Pendal.

Negative

• None.

BOSTON, May 9, 2021 /PRNewswire/ -- Pendal Group Limited (Pendal), parent company of J O Hambro Capital Management Limited (JOHCM), today announced that it has entered into an agreement to acquire 100% of Thompson, Siegel & Walmsley LLC (TSW), a Virginia-based value investment manager, for $320 million.

Established in 1969 and headquartered in Richmond, VA, TSW operates primarily in long-only equity (U.S. and International), with $23.6 billion of assets under management.¹ The deal will more than double assets under management by Pendal's U.S. business, which will increase from $21.1 billion to $44.7 billion.²

Pendal Group CEO, Nick Good, said, "This is a compelling opportunity to acquire a highly successful complementary business, which will create immediate value and facilitate our growth opportunities in the US market. This acquisition significantly broadens the range of product solutions we can offer clients via an expanded distribution network.

"TSW is a natural strategic and cultural fit with JOHCM and the broader Pendal business, particularly given our shared core belief in investment team autonomy. Both businesses have solid flow momentum and strong performing, high conviction investment strategies. TSW is also highly complementary to our business, with almost no overlap of investment strategies or clients."

TSW is a highly regarded value-oriented investment manager, with a solid base of institutional and sub-advisory relationships and a track record of strong investment performance: four of the six funds where TSW is the sole sub-advisor are rated either 4 or 5 stars by Morningstar and are ranked first quartile in their peer group over three years.³ Its investment capability spans international value equities, U.S. equities and fixed income. 

TSW has an experienced and stable staff of 74 employees including a long-tenured and talented investment team of 20, with deep bench strength across all strategies. The TSW team is fully supportive of the acquisition and aligned with Pendal's values, its ethos of investment autonomy and its growth aspirations. All TSW employees will join the Pendal Group and there are no staff reductions planned. TSW's investment strategies will remain under the TSW brand.

Mr. Good commented, "Cultural fit is crucial in fund management acquisitions, and both parties have put significant effort into considering compatibility, investment and client approach and alignment." 

TSW's CEO, Mr. John Reifsnider, will be appointed as CEO of Pendal's combined U.S. business upon close, taking over leadership of JOHCM USA from Mr. Good, who was promoted in March to Pendal Group CEO, in addition to his current role as CEO of TSW. Mr. Reifsnider will also join Pendal's Global Executive Committee.

Mr. Good said, "John is an outstanding leader and the right person to head the combined U.S. business. He will continue to drive the positive momentum that is evident in both companies and seize the new growth opportunities we see ahead of us."

Commenting on the transaction, Mr. Reifsnider said, "This is a unique opportunity for TSW to join a strategically compatible and highly regarded global investment management company. Pendal is a remarkable fit and has strong alignment to our investment approach and culture.

"All of us at TSW are pleased to be joining Pendal Group. We see excellent potential for growth and an exciting future.  

"I am proud to take on the role of CEO of the combined U.S. businesses. JOHCM has been very successful in the U.S., with 10 consecutive years of positive flows and an enviable reputation in the market. Investment autonomy is fundamental to both our businesses and to our success, and that match has been a very important consideration for the TSW team."

Mr. Good concluded, "Pendal's acquisition of JOHCM in 2011 was a tremendous success. We are approaching this acquisition of TSW with the same intent and focus and are confident that we will be able to implement a seamless transition."

NOTES TO EDITORS:

About Pendal Group
Pendal Group ("Pendal") is an independent global investment manager focused on delivering superior investment returns for clients through active management. Pendal manages $77.3 billion in AUM (as of March 31, 2021) in client assets through J O Hambro UK, Europe & Asia; JOHCM USA; Pendal Australia and Regnan.

Pendal operates a multi-boutique style business across a global marketplace through a meritocratic investment-led culture. Its experienced, long-tenured fund managers have the autonomy to offer a broad range of investment strategies with high conviction based on an investment philosophy that fosters success from a diversity of insights and investment approaches.

Listed on the Australian Securities Exchange since 2007 (ASX: PDL), the company has offices in Sydney, Melbourne, London, Prague, Singapore, New York, Boston and Berwyn, PA. 

About TSW
TSW is a US-based value-oriented investment management and advisory company, operating primarily in long-only equity (U.S. and International) and fixed income, with $23.6 billion of AUM (as of March 31, 2021). – AUM adjusted for the closure of a client account that occurred after March 31, 2021.

Established in 1969 and headquartered in Richmond, Virginia, the company is 75.1% owned by the NYSE-listed BrightSphere Investment Group (BSIG), although operates as an independent, autonomous, indirect subsidiary. The remaining 24.9% of shares in TSW are held by TSW current and former management.

About J O Hambro Capital Management (JOHCM)
JOHCM is a boutique investment management business with offices in London, Prague, Singapore, Boston, New York and Berwyn, Pennsylvania. It manages $43.1 billion of assets (as of March 31, 2020) across Global/International, Emerging Market, U.K., European, Asian, and Japanese equities strategies and a multi-asset strategy. JOHCM manages investment strategy capacity in order to promote market-leading portfolio performance.

About Regnan
Regnan is a responsible investment business within Pendal Group with a vision to grow its assets under management and become a global leader in providing environmental, social, and governance (ESG) investment strategies and solutions to clients.

Regnan exists to drive positive impact and investment for a sustainable future and works towards this by developing and promoting more principled, rigorous and outcome-oriented approaches in responsible investment. It has a long and proud heritage in engagement and advice on environmental, social and governance issues. Regnan has produced pioneering research that has changed the way investors think about their wider responsibilities to society including advising influential organizations, such as the Principles for Responsible Investment (PRI).

Regnan can trace its roots back to a collaboration with Monash University, Melbourne, in 1996, with an investigation into overlooked ESG-related sources of risk and value for long-term shareholders in Australian public-listed companies. Regnan has since taken its ESG expertise globally. Its diverse experience in advocacy, regulation, academia and advising investment managers has enabled Regnan to offer responsible investment-related advisory, engagement and research services.

Disclosures
©2021 Morningstar. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results. The Morningstar Rating™ for funds, or "star rating" is calculated for managed products (including mutual funds, variable annuity and variable life subaccounts, exchange traded funds, closed-end funds, and separate accounts) with at least a three-year history. Exchange-traded funds and mutual funds are considered a single population for comparative purposes. It is calculated based on a Morningstar Risk Adjusted Return measure that accounts for variation in a managed product's monthly excess performance, placing more emphasis on downward variations and rewarding consistent performance. The top 10% of products in each product category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars, and the bottom 10% receive 1 star. The Overall Morningstar Rating for a managed product is derived from a weighted average of the performance figures associated with its three-, five-, and 10-year (if applicable) Morningstar Rating metrics. The weights are: 100% three-year rating for 36–59 months of total returns, 60% five-year rating/40% three-year rating for 60–119 months of total returns, and 50% 10-year rating/30% five-year rating/20% three-year rating for 120 or more months of total returns. While the 10-year overall star rating formula seems to give the most weight to the 10-year period, the most recent three-year period actually has the greatest impact because it is included in all three rating periods. Ratings are for the share class shown only; other classes may vary.

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¹ As of March 31, 2021, AUM adjusted for the closure of a client account that occurred post March 31, 2021.
² AUM as of March 31, 2021. Includes assets managed by JOHCM and its wholly owned affiliates JOHCM (USA) Inc. and JOHCM (Singapore) Pte. Limited. All assets quoted in U.S. dollars.
³ Source: Morningstar Direct as of March 31, 2021, institutional share classes only.

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SOURCE J O Hambro Capital Management; Pendal Group Limited

FAQ

What is the value of the Pendal Group acquisition of TSW?

Pendal Group is acquiring Thompson, Siegel & Walmsley LLC for $320 million.

How will Pendal Group's assets under management change after the acquisition?

Pendal's U.S. assets under management will increase from $21.1 billion to $44.7 billion.

Who will lead Pendal's combined U.S. business after the acquisition?

John Reifsnider, CEO of TSW, will lead the combined U.S. business.

What are the expected benefits of Pendal Group acquiring TSW?

The acquisition is expected to enhance product offerings and expand client solutions through TSW's solid performance and assets.

How does TSW's performance contribute to Pendal Group's strategy?

TSW's strong investment performance and broad asset base align with Pendal's growth strategy and will provide complementary investment strategies.