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Munich Re rumoured to be in talks to sell its asset manager

21st June 2018 - Author: Luke Gallin

According to industry reports, Munich Re is rumoured to be in talks with U.S. fund manager Guggenheim Partners LLC about the sale of its asset management arm, Munich Ergo Asset Management GmbH (MEAG).

Munich ReThe Wall Street Journal first reported that talks are at an early stage, and that it remains uncertain if any deal will actually happen. Scott Minerd, who oversees Guggenheim’s asset-management unit, is reportedly eager to strengthen his division, which mainly oversees money from insurers.

For global reinsurer Munich Re, such a deal would free up some capital and also enable the group to focus more on the risk side of the business, effectively allowing a third-party specialist to manage the investment side of the business.

A note from J.P. Morgan analysts reveals that as of Q1 2018, MEAG managed €250 billion (US$289bn) of assets, of which €15.5 billion (US$18bn) are third party, with the rest being Munich Re own investments.

“We believe that if Munich Re were to sell MEAG, then effectively it would be equivalent to outsourcing its asset management, as the Munich assets would then be managed by a separately owned group,” said analysts.

Gallagher Re

Reports note that a spokesperson from Munich Re declined to comment on the matter, adding that there’s also currently no formal sale process.

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