Target: Russell Investments
Price: $2 billion to $2.5 billion
Seller: Northwestern Mutual Life Insurance
Financial Adviser: Goldman Sachs Group
Goldman Sachs Group, which is running the Russell process, has narrowed bidders to a handful of strategics and large buyout shops, three private equity sources said. “They are only letting in PE guys that are big enough to write the check,” one of the people said.
Private equity firms were expected to be very aggressive. Possible buyers could include Advent International, The Blackstone Group, Hellman & Friedman, Kohlberg Kravis Roberts & Co, Clayton Dubilier & Rice and The Carlyle Group, sources said. Some of the firms are expected to team up to buy Russell.
“It is a complicated business so that group could thin pretty quickly,” the first source said.
Northwestern Mutual Life Insurance bought Russell in 1998 in a deal that was estimated at $1.2 billion. Russell could fetch $2 billion to $2.5 billion, peHUB has reported.
Bids for Russell are due by March 15, the sources said.
Northwestern Mutual is “desperate” to avoid breaking up Russell, the second executive said. “That might make the most sense given the value of the indices.”
In January, Reuters reported that Northwestern was exploring a sale of Russell, which has $247 billion in assets under management. A sale has been expected since 2010 when Northwestern decided that the unit, which runs the Russell indices, was no longer core.
A Northwestern Mutual spokeswoman would not comment beyond its Jan. 29 statement where the insurance company confirmed it was exploring strategic alternatives, including a possible sale, for its majority stake in Russell.
Luisa Beltran is a senior writer for peHUB.