ReliaStar Plans More Fund Purchases
August 9, 1999
John Turner, chairman of ReliaStar Financial Corp. of Minneapolis, said his company may purchase additional mutual fund companies besides Pilgrim Capital Corp. of Phoenix.
ReliaStar announced its acquisition of Pilgrim for $258 million in late July. The deal is expected to close in the fourth quarter.
Pilgrim, with $7.6 billion in assets under management, will be merged into ReliaStar's fund unit, Northstar Investment Management Corp. of Stamford, Conn., which has $4.4 billion of assets under management.
Turner said he is interested in acquiring more fund companies because of economies of scale; companies with more assets under management generate greater revenue and can pass along lower fees to investors, he said. The more assets under management, the easier it is for a fund company to attract talented portfolio managers and, therefore, generate better returns, he added.