Benzinga | Feb 8, 2021 04:00PM EST

Touchstone Investments to Acquire Certain Retail Mutual Fund Business Assets from AIG Life & Retirement

The transaction excludes AIG Life & Retirement's fund management platform dedicated to its variable insurance products

NEW YORK--(BUSINESS WIRE)-- AIG Life & Retirement, a division of American International Group, Inc. (NYSE:AIG), and Touchstone Investments, an indirect wholly-owned subsidiary of Western & Southern Financial Group, today announced they have entered into a definitive agreement for Touchstone to acquire certain assets of AIG Life & Retirement's Retail Mutual Funds business.

AIG's Life & Retirement's Retail Mutual Funds business manages $7.8 billion in assets across eighteen funds as of December 31, 2020. In the proposed transaction, which is subject to fund shareholder approval and is expected to close in mid-2021, twelve funds with approximately $7.5 billion in assets would be reorganized into Touchstone funds.

Under the terms of the agreement, twelve retail mutual funds currently managed by SunAmerica Asset Management, LLC (SAAMCo), a member of AIG Life & Retirement, will be reorganized into either existing Touchstone funds or into newly created Touchstone funds, each of which is or will be advised by Touchstone. Six retail mutual funds currently managed by SAAMCo not included in the transaction will be wound down and liquidated. AIG Life & Retirement will retain its fund management platform and capabilities dedicated to its variable insurance products. Tables 1 and 2 below set out the proposed actions for each fund.

"Our retail mutual funds platform has been a pioneer in rules-based investing and has generated long-term returns since its inception," said Kevin Hogan, Executive Vice President and CEO of AIG Life & Retirement. "The decision to sell this business is not related to AIG's decision to separate the Life & Retirement business, rather we determined that it was no longer core to our offering. We are confident that the funds' shareholders will benefit from the experienced management, strong distribution platform, scale and service that Touchstone will provide. I would like to sincerely thank the team that has helped to make the retail mutual funds business the success that it is today."

"We are committed to providing a seamless transition for AIG funds' shareholders to our Touchstone funds," said Blake Moore, President and CEO of Touchstone. "We believe that our actively managed mutual funds provide innovative solutions to help shareholders achieve their financial goals. We are confident that both AIG funds' shareholders and their financial professionals will be well served by Touchstone."

After the completion of the acquisition, the Touchstone complex will exceed $30 billion in assets under management and will include 33 mutual funds across asset classes and investment styles for both retail and institutional investors.

Piper Sandler and Willkie Farr & Gallagher LLP advised AIG on the transaction.

Table 1: AIG funds that will be mapped into existing Touchstone Funds

AIG Fund Reorganized into existing Touchstone Funds

AIG Focused Alpha Large-Cap Touchstone Large Cap Focused Fund

AIG Focused Growth Fund Touchstone Sands Capital Select Growth Fund

AIG Active Allocation Fund Touchstone Balanced Fund

AIG Multi-Asset Allocation Fund Touchstone Balanced Fund

AIG Strategic Value Fund Touchstone Value Fund

AIG Senior Floating Rate Fund Touchstone Credit Opportunities Fund

AIG U.S. Government Securities Fund Touchstone Active Bond Fund

AIG International Dividend Strategy Touchstone International Equity FundFund

Table 2: AIG funds that will be mapped into new Touchstone funds

AIG Fund Reorganized into new Touchstone Funds

AIG Focused Dividend StrategyFund Touchstone Dividend Equity Fund

AIG Select Dividend Growth Fund

AIG Strategic Bond Fund Touchstone Strategic Income Opportunities FundAIG Flexible Credit Fund

The AIG funds to be wound down are AIG Government Money Market Fund; AIG ESG Dividend Fund; AIG Income Explorer Fund; AIG Small-Cap Fund; AIG Commodity Strategy Fund and the AIG Japan Fund.