Federated Investors announced its third money fund acquisition of the year, following earlier 2012 deals with the U.K.-based Prime Rate funds and the remainder of Fifth Third's money fund complex. A press release on the latest deal entitled, "Federated Investors' Mutual Funds to Acquire Approximately $903 Million in Assets from Performance Funds Trust," is subtitled, "Assets of eight equity, fixed income and money market funds of Performance Funds Trust to transition into seven Federated funds." It explains, "Federated Investors, Inc., one of the nation's largest investment managers, and Trustmark Corporation announced that a definitive agreement has been reached between Federated, Trustmark Investment Advisors, Inc. and Trustmark National Bank in connection with the proposed reorganization of approximately $903 million in assets, including about $571 million in money market fund assets, of the funds of Performance Funds Trust into Federated funds with similar investment objectives. Under the agreement, Trustmark Investment Advisors, Inc. will sell certain assets relating to its management of the Performance Funds to Federated or certain Federated advisory subsidiaries. The financial terms of the agreement were not disclosed."
The release explains, "The Performance Funds comprise eight mutual fund portfolios of Performance Funds Trust: four equity, two fixed income and two money market funds. Trustmark Investment Advisors, Inc. is a wholly owned subsidiary of Trustmark National Bank and investment adviser to the Performance Funds. The Performance Funds Trust's Board of Trustees has determined to recommend to shareholders of the Performance Funds that they vote to approve the applicable reorganization. The reorganization of each Performance Fund is subject to approval by the shareholders of the applicable Performance Fund and the satisfaction of certain other conditions of closing. It is anticipated that a meeting of shareholders of the Performance Funds to approve the proposed reorganizations will take place in September 2012. Shareholders of the Performance Funds will receive proxy materials describing the proposed reorganizations in greater detail in the near future. Once the proposed reorganizations are completed, Trustmark will no longer serve as investment adviser to the Performance Funds."
Federated Investors President and CEO J. Christopher Donahue comments, "Federated maintains a longstanding tradition of working closely with banks to offer high quality investment products that meet the needs of their customers. That approach, combined with the strength of our intermediary-driven customer service, provides an ideal opportunity for the shareholders of the Performance Funds to transition to Federated. We remain very interested in additional similar transactions."
Doug Ralston, president of Trustmark Wealth Management and Trustmark Investment Advisors, Inc., adds, "Trustmark's goal is to offer our clients best in class money management services. The Performance Funds shareholders will gain a broader, more diverse product offering and the global experience of Federated's investment management team. Federated and Trustmark share the same philosophy that the client is our first priority."
Federated is the third largest manager of money funds in the U.S. with $230.8 billion as of May 31, 2012, according to our Money Fund Intelligence XLS product, and they rank 4th globally with $241.1 billion according to our Money Fund Intelligence International. As we mentioned in the April issue of our Money Fund Intelligence newsletter ("Another Two Bite the Dust: Consolidation Becomes Real"), both Fifth Third's fund complex and KeyBank's Victory funds have announced exits from the money fund business. (Note that Crane Data did not track the Performance Funds due to size and lack of reporting.)
MFI stated then, "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, which also includes lots of mergers and streamlinings." (See 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".)
