Deals & People March 31, 2009

Report: CVC Capital in Talks to Buy iShares

CVC Capital Partners is in exclusive talks with Barclays to buy its exchange-traded funds business, iShares, according to a news report.
Reported by

The price is around £3 billion ($4.28 billion)—equivalent to 10 times the business’ earnings before interest, taxes, depreciation and amortization, people familiar with the matter told Dow Jones. The price does not include the securities lending business.

Barclays would get warrants equivalent to 20% in iShares as part of the deal, but the terms of the warrants have yet to be ironed out, one person familiar with the situation said. The warrants would allow Barclays to participate in any upside in the value of iShares in the future.

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The deal is expected to be completed by the end of the week. The London-based buyout firm entered the auction relatively late in the process (see “Barclays to Wrap Up iShares Bidding’).

According to the news report, other bidders for iShares included a group comprising Hellman & Friedman and Apax Partners and another consortium made up of Colony Capital and Bain Capital. Goldman Sachs is also likely to have put in a bid, the sources said.

The Markets March 31, 2009

Mutual Fund Flows Backtrack in February

The combined assets of the nation's mutual funds decreased by $372.1 billion, or 4%, to $9.036 trillion in February, according to the Investment Company Institute (ICI).
Reported by

Long-term funds—stock, bond, and hybrid funds—had a net outflow of $12.13 billion in February, verse an inflow of $25.02 billion in January (see “Sales not Enough to Counter Mutual Fund Losses’).

Stock funds posted an outflow of $25.03 billion in February, compared to an inflow of $8.92 billion in January. Among stock funds, world equity funds (U.S. funds that invest primarily overseas) posted an outflow of $10.76 billion in February, while funds that invest primarily in the U.S. had an outflow of $14.27 billion, ICI data showed.

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Money market funds, which have been popular during the market turmoil of the past year and saw an inflow of $59.47 billion in January, had an outflow of $6.44 billion in February. Funds offered primarily to institutions had an outflow of $1.11 billion, and funds offered primarily to individuals had an outflow of $5.33 billion.

The investor’s choice for the month was bond funds, with an inflow of $17.15 billion. Taxable bond funds had an inflow of $12.82 billion, while municipal bond funds had an inflow of $4.34 billion.

Hybrid funds posted an outflow of $4.25 billion in February.

The ICI data is here.

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