Though things have been relatively quiet on the money market fund consolidation front of late, another small deal was announced yesterday. A press release, entitled, "Reich & Tang Acquires Value Line U.S. Government Money Market Fund," says, "Reich & Tang, the third longest running money market mutual fund complex in the world, today announced that it has acquired the Value Line U.S. Government Money Market Fund. The transaction was completed on October 19, 2012." The release adds, "Reich & Tang, a subsidiary of Natixis Global Asset Management S.A., has been providing money market funds and liquidity solutions for nearly four decades and has built a reputation as a conservative investment manager within its peer group."
Michael Lydon, Chief Executive Officer of R&T, comments, "We are pleased to have completed a deal with Value Line that accomplishes its primary goal of adding shareholder value. The deal also underscores Reich & Tang's commitment to growing its money fund business and diversifying its shareholder base."
The release adds, "The market environment for money funds over the past few years has prompted many investment managers to reconsider their money market fund offerings to focus on the growth and distribution of their core investment products. The ancillary benefit of managing money market funds in addition to core fund offerings has significantly diminished over the past couple of years."
Mitchell Appel, President of Value Line Funds, states, "By adding the Reich & Tang Daily Income Fund U.S. Government Portfolio to our suite of products, our retail shareholders benefit by investing in a larger pool of assets with a lower gross expense ratio. As a result, the Value Line Funds' investment adviser can focus more resources on managing our equity and hybrid funds, many of which are rated 4 and 5 stars overall by Morningstar and are leaders in their categories."
The release also says, "Reich & Tang remains one of the largest companies in the nation dedicated solely to money funds, and deposit and liquidity solutions." Lydon concludes, "Our singular focus provides shareholders with access to the money fund management expertise of Reich & Tang while preserving the brand integrity of Value Line, which is an ideal solution that extends the promise of providing shareholders with more choice and flexibility with their cash investments."
Reich & Tang is the 28th largest manager of U.S. money funds (out of 73 tracked by Crane Data) with $7.4 billion. The company manages the Daily Income Funds as well as the new, top-yielding Reich & Tang Natixis Liquidity Prime Portfolio. The company also offers a series of FDIC insured products to brokerages and others. Note that Crane Data did not track the now-deceased Value Line US Govt MMF.
While it's been four months since we've seen any money funds liquidate or consolidate in the U.S., there has been some activity in Europe. In August, Bank of America announced plans to liquidate its Euro Money Fund (see Crane Data's Aug. 21 News "BofA to Close and Liquidate Global Liquidity Euro Money Fund"), and Tuesday Moody's withdrew its Aaa-mf money market fund rating on PIMCO Funds: Global Investors Series plc, Euro Liquidity Fund (sometimes the sign of a pending liquidation). (For the last updates on liquidations and mergers, see Crane Data's June 28 News "Federated Acquiring Trustmark's Money Funds in 3rd Rollup of Year" and the April 2012 issue of our Money Fund Intelligence newsletter, "Another Two Bite the Dust: Consolidation Becomes Real," which discussed Fifth Third's and KeyBank Victory's exits from the money fund business.
As we said in our April MFI, "In the past two years, we've seen Old Mutual, Paypal, Pacific Capital, Pioneer (partial), Scout (UMB), Ridgeworth (merged into Federated), Eagle (Raymond James), and a handful of others announce liquidations. The number of funds tracked by Crane Data has fallen from 1,310 to 1,209 [it's now 1,193], which also includes lots of mergers and streamlinings." (See also our April 6 Crane Data News "Federated To Acquire (The Rest of) Fifth Third Money Market Funds" and our Dec. 22, 2011 News "Federated to Acquire Prime Rate Sterling, Euro, USD Liquidity Funds".)
