Columbia Threadneedle to acquire Pyrford International

Columbia Threadneedle Investments (CTI) is to acquire BMO Financial Group's EMEA Asset Management business. CTI, the global asset management unit of Ameriprise Financial, Inc, expects the transaction to close towards the end of this year subject to regulatory approvals. In the process, CTI will become the new owner of Pyrford International, manager of the Pyrford Global Total Return fund.

Pyrford was founded in 1987 and has been part of BMO Financial Group since 2007, though it maintains its independence. This means Pyrford retains control over its investment activities, and can stay true to its investment philosophy. We think it's a good thing it still operates as a 'boutique' investment group, while benefitting from the support and infrastructure provided by a much larger owner.

Acquisitions and other corporate changes have the potential to unsettle investment teams. After recent meetings with Pyrford and CTI, we are pleased by indications that CTI wishes to maintain Pyrford's independence from its parent organisation, and to ensure that its staff are incentivised to remain.

We think that its independence is partly what enables Pyrford to maintain such a stable and close-knit investment team. There has been little turnover within the team and most members have spent the bulk of their investing careers at the group. This reflects well on the culture they have cultivated over the years.

What happens next?

While some details aren’t yet certain, CTI and Pyrford have set out how they expect things to be after the acquisition. CTI will take over certain non-investment support functions that BMO currently performs for Pyrford, such as operational and technology support, and retail distribution. Pyrford will keep its own brand, the same investment team will continue to manage the fund, and the investment process will not change. Pyrford will continue to work in its own offices and will still be a separate legal entity to its owner.

This would represent ‘business as usual’. Of course, there are no guarantees with any acquisition, and Pyrford's relationship with CTI could change in the future.

The Pyrford Global Total Return fund is currently on our Wealth Shortlist of funds selected by our analysts for their long-term performance potential. Given that we expect Pyrford to continue working and managing the fund as before, we retain our conviction. We will continue to monitor the situation closely, and will let investors know if our view on the fund changes.