Principal Financial Group, Des Moines, Iowa, announced that it plans to acquire the mutual fund management business of Washington Mutual Inc., Seattle, for $740 million.
Principal agreed to buy WM Advisors Inc. from the bank for cash. WM Advisors manages the WM Group of Funds, a family of 40 retail mutual funds and variable trust funds in a broad range of asset classes.
WM Advisors has more than $26 billion in assets under management, including about $21 billion in the WM Funds, which provides investment advice to mutual funds, variable trust funds and asset allocation portfolios for about 800,000 fund shareholder accounts.
The transaction would bring managed assets in Principal's Mutual Funds division to about $49 billion from the current $28 billion. That would rank the unit as the 43rd largest U.S. fund family, the insurer says.
Principal Mutual Funds was the 12th best-selling fund family in 2005, according to the Financial Research Corp., Boston.
Principal is a major player in the small to midsize group retirement plan business as well as the group and individual insurance marketplace.
"The acquisition, which gives us wholesale distribution resources more than 100 strong, provides an established platform to access the retail markets, as well," says Larry D. Zimpleman, president and chief operating officer of Principal.
WM Advisors has some 200 employees based mostly in Seattle and Sacramento. With more than $12 billion of lifecycle target-risk fund assets under management, the firm is known for its Strategic Asset Management Portfolios, a series of five fund of funds for different investor risk profiles or target-risk funds.
