Northwestern Mutual has agreed to sell the firm’s Russell Investments subsidiary to the London Stock Exchange Group for $2.7 billion.

Northwestern Mutual has agreed to sell its Washington-headquartered Russell Investments subsidiary - the creator of the Russell Indexes - to the London Stock Exchange Group for $2.7 billion, the firm said today.

The sale will be finalized later this year, pending regulatory and LSEG shareholder approvals, as well as satisfaction of other closing conditions. Russell’s president and chief executive, Len Brennan, will join the executive committee of LSEG upon completion of the transaction.

LSEG gave no further details at this stage on how staff at Russell will be impacted or if Brennan will retain his role as Russell's leader when contacted by Family Wealth Report. This publication has contacted Russell for additional detail on the reason for the sale. 

Russell is a global investment services firm that oversees some $260 billion in assets and works with over 2,500 institutional clients, independent distribution partners, global individual investors and financial advisors. The acquisition brings together $5.2 trillion of assets benchmarked to Russell and an estimated $4.0 trillion of equities benchmarked to FTSE.

LSEG said Russell’s investment management business is one of the leading providers of multi-asset class investment solutions to institutional and retail investors in the world; its directors "believe the acquisition is a rare opportunity to acquire a high quality US business with a leading global brand providing index and investment management services". Among other factors, it also allows LSEG to capitalize on industry trends such as strong growth in multi-asset solutions and passive investment strategies, according to a statement.

"With this acquisition we are strongly positioned for the changing dynamics in the global indices market with a best in class offering, which we believe will help deliver outstanding returns for our shareholders. We will work with Brennan and his team to review the investment management business and determine its fit with the group," said Xavier Rolet, CEO of LSEG.

Northwestern Mutual manages over $184 billion in invested assets as part of its general account investment portfolio, which backs its insurance and annuity products. The firm is the marketing name for The Northwestern Mutual Life Insurance Company and its subsidiaries: Northwestern Mutual Investment Services; the Northwestern Mutual Wealth Management Company; Northwestern Long Term Care Insurance Company; and Russell Investments.

“The proceeds from the sale will cap off what has proven to be a good investment for Northwestern Mutual,” said John Schlifske, chairman and chief executive of Northwestern Mutual. “When you look at the income it produced over all that time and this sale price you see a great example of how we build value for policy owners of our mutual company.”