Bidders circle Russell Investments arm auctioned by LSE

At least six bidders are circling Russell Investments, the large US asset manager that is being sold by the London Stock Exchange Group, according to people close to the process.

An auction process for the business, which has $273bn in funds under management and is expected to fetch as much as $1.5bn, is now in the second round.

The LSE is shedding the operation, part of the Frank Russell Company, which it agreed to acquire less than a year ago for $2.7bn.

The remaining strategic and private equity bidders include Towers Watson, the US human resources and risk management consultancy, and financial services group Ameriprise, which owns the UK's Threadneedle Investments.

These people said that the interest from Towers Watson, which is focused on consulting rather than asset management, may mean that other risk managers such as insurance brokers Aon and Marsh and McLennan are also following the process closely.

Others bidders are believed to include at least one China-based group and a small number of private equity firms.

Goldman Sachs and JPMorgan Chase are running the sale process for the LSE. Both banks and the LSE declined to comment. Towers Watson, Ameriprise and Aon declined to comment.

Several other private equity firms such as KKR and CVC had also taken an interest in the process. However, many did not make it through after first-round bids. Canadian Imperial Bank of Commerce, which has been seeking to ramp up its exposure to assets in the US, had been interested in the unit but it is not clear if it is still involved.

Meetings with the management of Russell have been held in Seattle, Washington in recent days and the next round of bids are due in the coming weeks.

The LSE's acquisition of the Frank Russell Company from insurer Northwestern Mutual highlights its ambition to grow in the US, which is the world's largest fund management market and the largest single for market exchange traded funds.

The LSE bid for the entire Frank Russell Company to ensure it won a competitive auction that attracted rival bids from other financial data providers and exchanges, who also coveted the index business.

More than $5tn in assets are benchmarked to Russell indices, which include the well-known Russell 2000 for listed small-cap US companies.

Some asset managers and investment banks had expressed concern that the exchange's long-term ownership of its own asset manager could put it into conflict with its users.

One person following sale process closely said that the decision to separate the fund management may have also exacerbated tensions internally at Russell.

Additional reporting Alistair Gray, James Fontanella-Khan and David Oakley

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