According to a press release, Morley Financial will continue to be led by Jill Cuniff, who has been Morley’s Managing Director and Chief Investment Officer for the past six years.
It will also retain its investment philosophy and process, as well as the company name, organizational structure and headquarters in Portland, Oregon. Principal Global Investors is acquiring Morley for approximately $75 million. The transaction is expected to be neutral to 2007 GAAP earnings per diluted share (EPS) and marginally accretive to EPS in 2008.
“The acquisition of Morley Financial represents a strong strategic fit for Principal Global Investors as we continue to strengthen our portfolio of offerings suitable for retirement investing and other long-term investment strategies,” said Jim McCaughan, CEO of Principal Global Investors. “Stable value, at more than 10 percent of the 401(k) market assets, is an important capability – one we believe baby boomers will increasingly demand as they move toward retirement and seek investment options to preserve their capital and generate income. In addition, this acquisition will enhance our ability to offer outcome-based solutions, such as absolute return strategies, which will help us further penetrate the institutional market.” Outcome-based investing, which focuses on achieving a specific return over a cash rate, has begun to displace traditional benchmark-oriented investing.
“The Morley transaction enables us to focus on becoming a more comprehensive leader of financial solutions as we transition to a sub-advised platform,” said John H. Grady, president and chief executive officer of Nationwide Funds Group. “We have enjoyed our successful relationship with Morley Financial Services and look forward to future successes as the firm becomes a sub-adviser to Nationwide Funds.”