American Beacon Advisors Inc, which is a mutual fund management firm owned by Pharos Capital Group LLC and TPG Capital LP, is now exploring a possible sale.
According to sources familiar with the matter, an auction for the firm, which is being managed by JPMorgan Chase, is now underway.
American Beacon was sold to Pharos and TPG in 2008 by AMR Corp (the former parent company of American Airlines).
American Beacon’s Largest Mutual Funds
| Symbol | Fund | Total Assets |
|---|---|---|
| AAGPX | American Beacon Large Cap Value Fund | $11.9B |
| ABBVX | American Beacon Small Cap Value II Fund | $8.7B |
| AVPAX | American Beacon Small Cap Value Fund | $5.8B |
The Bottom Line
This possible deal is would just be one of the many deals that have been made so far in 2014. If this sale is successful, it could inspire future M&A activity with mutual fund firms as many small funds struggle to compete with larger funds.
For some smaller funds, merging or being acquired may be the best option. With help from a larger fund company, smaller funds are able to gain significantly more exposure from investors.