Boston fund manager Columbia Threadneedle Investments has just made its biggest acquisition under Ameriprise Financial’s ownership, by inking a deal to buy Bank of Montreal’s European asset management business for $845 million.
The deal, announced Monday, adds significant heft to Columbia Threadneedle’s assets under management, with $124 billion managed by the business being acquired from BMO Financial Group. The fund group being sold is primarily in Europe, with some operations in the Middle East and Asia. Columbia Threadneedle also expects to bring many of BMO’s fund management clients in the US on board, pending their approval.
After the deal closes at the end of the year, Columbia Threadneedle will manage more than $670 billion in mutual funds, separate accounts, real estate, and other financial assets. Technically, it’s Ameriprise making the acquisition, but the business will be folded into Ameriprise’s Columbia Threadneedle division.
“It definitely bolsters our weight,” Truscott said. “It’s a very complementary deal to us. It adds capabilities that we either lack, or would like to build.”
For example, the deal brings real estate on continental Europe into Columbia Threadneedle’s fold, and it will accelerate the company’s efforts to expand its ESG options, which are funds focused on “environmental, social, and governance.”
Columbia Threadneedle employs about 2,000 people, including 550 in Boston. The BMO business employs about 800 people, and Truscott said he expects to keep “the vast majority” of them after the acquisition is complete.
Meanwhile, the firm is shrinking on another front: its Boston office footprint. The company is preparing to relocate its headquarters from 225 Franklin St. to 290 Congress St., on Atlantic Wharf, in a two-part move that begins in July and will be complete in early 2022. It will lease 82,000 square feet over two floors for its new office, or just over half of what it leases now. Once the COVID-19 pandemic is over, most investment management professionals will come in every day while others use the office for part of the week and work from home the rest of the time.
“We really see a hybrid model in Boston going forward,” Truscott said. “We’ll see how that applies ... to our other locations.”