SPRINGFIELD, Mass. -- Massachusetts Mutual Life Insurance Co. announced Wednesday it will buy Oppenheimer Management Corp., one of the largest mutual fund companies, in cooperation with Oppenheimer's senior executives.
MassMutual, the 11th-largest U.S. life insurance company, and the management of Oppenheimer, said in a joint statement they would buy the firm from British & Commonwealth Holdings PLC for around $150 million.
MassMutual spokesman William Persch declined to detail the terms of the deal. But he said, 'We are obviously the controlling partner in that -- we're investing the largest capital position.'
Asked how the transaction came about, he said British and Commonwealth, based in London, was in bankruptcy and obliged to divest.
'I think we were looking for each other,' said Richard Dooley, MassMutual's chief investment officer and executive vice president.
'We were in a search for additional investment management capability to add to our present stable,' Dooley said.
'In May we first heard of the possibility that Oppenheimer might come onto the market,' he said. 'We called them and said let's talk, and did, and had several meetings, and from there it got quite obvious.'
Oppenheimer will be 'very much a stand-alone' unit he said. 'We view it as a partnership relationship, to see how much each can help the other. They're successful and we don't want to change that.'
In 1989, Oppenheimer's Global Fund ranked 10th among U.S. international funds in terms of percentage gain, gaining 37.4 percent per share, Donoghue's Mutual Funds Almanac said. Its year-end assets were $145.9 million.
John Fossel, Oppenheimer's president and chief executive officer, said in the statement he was 'confident that the funds' shareholders and their financial advisers will benefit from' the new partnership.
MassMutual President Thomas Wheeler said the association with Oppenheimer 'complements our strengths' and that the two companies share a philosophy that calls for 'prudent, consistent, above-average performance.'
Oppenheimer Management operates more than 50 mutual funds with assets of over $14 billion, with more than 1.2 million shareholder accounts.
MassMutual, with $25 billion in assets, writes individual and employee life insurance policies, underwrites health and pension benefits and provides some investment management services through eight mutual funds.
But Dooley said some of MassMutual's smaller funds might merge with compatible Oppenheimer funds. 'That's one area where over time we'll see if there are some efficiencies that can be accomplished,' he said.
The acquisition was subject to the approval of the independent directors and shareholders of Oppenheimer's various funds, the statement said.
