Guardian to Acquire a Majority Stake in RS Investments
New York and San Francisco, May 17, 2006 - The Guardian Life Insurance Company of America (Guardian) and RS Investments (RS) today announced that the New York-based insurer will acquire a 65% interest in RS, a privately held San Francisco investment management firm specializing in growth and value mutual funds and institutional accounts.
The transaction is subject to approval by the board and shareholders of the RS mutual funds, as well as regulators. Once the transaction is approved, RS will operate as an independent subsidiary of Guardian, under the leadership of CEO Terry Otton and the existing management team. The firm will maintain its current operations and continue to serve all its investors and clients. There will be no changes to the RS portfolio management teams. The two companies also propose to integrate all Guardian-sponsored funds into the RS mutual fund family later this year, subject to the approval of the board of trustees of both fund families and the shareholders of the Guardian-sponsored funds. With Guardian's focus on core equity and fixed income products and RS's expertise in growth and value products, a combined mutual fund family will include a more diversified range of funds than either company currently offers. The combination will raise RS's assets under management to over $17 billion, from approximately $11.8 billion today.
"We are creating a mutually beneficial organization that offers growth opportunities for both firms, our policyholders, our investors, and our distributors," said Dennis Manning, Guardian CEO. "This combination will create greater opportunity for current and future investors. Fund shareholders will have access to an expanded product line with complementary investment strategies. What's more, we will continue to build on our tradition of combining professional advice and sound investment management to support our customers' pursuit of their financial goals."
"This transaction enables RS to maintain the continuity of our deeply embedded investment culture, rigorous investment processes, and experienced investment teams, while continuing to grow in a rapidly evolving industry," said Terry Otton. "RS's investment professionals and executives continue to retain substantial ownership in the firm. Additionally, this restructuring creates equity incentives for the next generation of RS professionals. Reflecting our rich legacy of two decades of success in investment management, RS will maintain a strong, performance-oriented investment culture, dedicated to delivering consistent, long-term results."
"Within the investment industry and among financial professionals, RS has an outstanding reputation," Manning said. "We will use Guardian's extensive distribution platform to expand the breadth and depth of RS's market penetration. The scope and scale of our distribution of RS mutual funds will bring more choices to more customers."
"RS remains committed to meeting the needs of our individual and institutional investors. As a result of this transaction, we can offer access to a broader product line and increased services," said Otton. "We recognize the added value financial intermediaries bring to many investors, and we anticipate that Guardian will be instrumental in building our presence with many of these organizations and their advisors."
De Guardiola Advisors, Inc. acted as a financial adviser to Guardian, and Grail Partners LLC acted as financial adviser to RS on this acquisition. The terms of this agreement will not be disclosed.