CIBC, buyout shops circle Russell Investments

Target: Russell Investments

Price: As much as $3 billion

Suitors: Canadian Imperial Bank of Commerce; CVC Capital Partners Ltd and Silver Lake; Warburg Pincus LLC and TPG Capital LP

Seller: Northwestern Mutual Life Insurance Co

Private equity firms CVC Capital Partners Ltd and Silver Lake have teamed up to pursue Russell Investments, as have Warburg Pincus LLC and TPG Capital LP, the people told sister news service Reuters. They and CIBC are considering bids for all of the Russell Investments assets, they added.

Northwestern Mutual Life Insurance Co, which owns Russell Investments, is hoping to find a buyer for both the investment management and indexes businesses of Russell for as much as $3 billion, the people said.

Shortlisted parties have been tentatively asked to submit offers for Russell Investments by the end of April, the people said. Some other bidders in the auction are only interested in some of the assets. MSCI Inc, for example, is interested only in Russell’s indexes business, some of the people said.

The sources asked not to be identified because the deliberations are confidential. Northwestern Mutual, CIBC, Warburg Pincus, TPG, CVC and Silver Lake declined to comment, while a MSCI spokeswoman did not respond to a request for comment.

Seattle-based Russell provides pension consulting, investment management, transition management services and indexes such as the Russell 1000 Global Index. It has more than $259 billion in assets under management, according to its website.

Reuters first reported in January that Milwaukee-based insurer Northwestern Mutual was discussing selling the Russell subsidiary because it decided the unit is not a core part of its business.

For CIBC, an acquisition of Russell Investments would boost its asset management business and its global presence. The Toronto-based bank, like many of its Canadian peers, has stated that it plans to actively build scale in its asset management business via acquisitions.

CIBC faced a setback last year after losing out on a long-standing lucrative deal with loyalty-program company Aimia Inc and the latest industry data indicates that it has now ceded its spot as Canada’s largest credit card issuer to rival Toronto-Dominion Bank, which last year agreed to buy half of CIBC’s Aeroplan credit card portfolio.

Alternative asset manager Carlyle Group LP considered acquiring Russell Investments earlier this year to expand its product offerings, rather than as a buyout fund investment, people familiar with the matter said at the time, but the Washington, D.C.-based firm is no longer in the auction.

A Carlyle spokesman did not immediately respond to a request for comment.

Greg Roumeliotis and Mike Stone are correspondents for Reuters in New York, Euan Rocha, in Toronto.