Robeco Investment Management (RIM) is exiting its US fixed income business and has entered into a definitive agreement with Morgan Stanley Investment Management (MSIM) through which MSIM will, subject to client consent, assume the management of approximately $4.8 billion in taxable US fixed income assets currently managed by Robeco Weiss, Peck, and Greer.
The transaction is expected to close in May 2008. Separately, RIM is in the process of finalising the exit of its US municipal fixed income business a deal expected to close in the first half of 2008.
RIM elected to exit the US fixed income business as sufficient scale wasnot achieved to provide a platform for significant long-term growth. As aresult, the company will concentrate its fixed income capabilities inEurope, where it will continue to manage over $60 billion in Global FixedIncome portfolios led by its Netherlands-based team.
“The continuity of the investment teams, the quality of the investmentprocesses, and our excellent long-term performance provide a strongfoundation upon which to continue to build the business. I am particularly excited this platform allows for organic growth of our flagship products, and other natural product extensions such as international equity, 130/30 equity and portable alpha strategies,” says said William Kelly, CEO, RIM.
Kelly noted that an additional key aspect of the alignment is theintroduction of meaningful employee ownership that will place equity intothe hands of key investment professionals.
“Employee ownership will be an important component of RIM going forward. We have always believed that equity ownership was integral to attracting and retaining investment talent. By placing ownership in the hands of our key professionals, we are further aligning the interests of our clients with us as new shareholders,” adds Kelly.
Once the strategic decision to exit the US business was made, RIM soughtquality partners that could capably manage institutional assets and serve as an option for clients to consider for the ongoing management of theirportfolios. As a result of its due diligence RIM is confident that it hasfound such a partner.
“We are excited to have the opportunity to work with and welcome RobecoWeiss, Peck, and Greer’s clients to Morgan Stanley Investment Management. We are confident that MSIM’s scale, infra-structure and value proposition are well suited to fulfill their fixed income needs in the long run. This agreement underscores our continued commitment to serving the institutional market,” says David Germany, head and chief investment officer of MSIM’s Global Fixed Income business.
In addition to its US-based equity and alternative capabilities, RobecoInvestment Management has imported innovative investment applications managed by Robeco in Europe including the firm’s pioneering role in the field of sustainable investing including water, climate change, and clean tech private equity investments. This follows the successful US introduction of its emerging market equity strategies.