N.Y. Life Relaunches Asset Unit
New York Life Insurance Co.'s renamed New York Life Investment Management Holdings LLC unit was relaunched Tuesday as a limited liability company.
This status lets any potential financial liabilities of the unit, formerly New York Life Asset Management, be walled off from the parent company's finances.
Steve Rousin, president and chief operating officer of the unit, said the primary reason for the move was to separate New York Life's asset management activities from the rest of its core insurance activities.
The unit has $115 billion of assets under management in its 11 business units. Its MainStay family of 23 retail and 11 institutional funds has $20 billion of assets.
New York Life Investment Management also takes care of the insurance company's domestic equity, private placement, and international fixed-income portfolios.
"We wanted to manage our investment managers independently, but we also wanted people to appreciate that we were a division of New York Life," Mr. Rousin said.
The relaunched unit also announced a deal Monday to buy Towneley Capital Management, a New York asset management firm with $600 million of assets in its four-fund Eclipse family, for an undisclosed price. The deal will close when approved by Eclipse Funds' shareholders.
Diane Kagel, a New York Life spokeswoman, said the Eclipse family, which would be available through all of New York Life's distribution channels, would retain their current names and managers.
Dennis Gallant, an insurance analyst at Cerulli & Associates, said New York Life's move to distance management from its investment products sales forces follows a trend. Merrill Lynch and Prudential are upgrading and revamping the management of their proprietary funds to separate them from the parent companies, though neither firm has taken the LLC route, he said.
"This is a kind of protectionism," Mr. Gallant said. "Funds need to perform, because investors have the option to choose from so many funds. They aren't just going to select a fund because it is a Merrill Lynch fund or a New York Life fund. By splitting off their asset management division, companies are hoping to keep their proprietary funds competitive and distinct."