Press Release

Macquarie Group to acquire Waddell & Reed Financial, Inc. and enter into a long-term partnership with LPL Financial

Sydney, 03 December 2020

Key Points

  • Macquarie Group to acquire Waddell & Reed Financial, Inc., a NYSE-listed US-based asset and wealth manager for $US1.7 billion ($A2.3 billion1)
  • Waddell & Reed Financial, Inc. has two businesses:
    • an asset management business with approximately $US68 billion in assets under management (AUM) and
    • a wealth management business with approximately $US63 billion in assets under administration (AUA)
  • On completion, Macquarie Group to sell the Waddell & Reed Financial Services, Inc. wealth management business, to LPL Financial Holdings Inc. for $US300 million plus excess net assets
  • Increased scale and diversification of combined platform will create significant long-term benefits for clients, advisors and shareholders
  • Long-term partnership between Macquarie and LPL will provide continuity for the existing wealth business and clients as well as longer-term opportunities to partner with the largest US independent broker-dealer
  • Expected to close by mid-2021, subject to regulatory approvals, Waddell & Reed Financial, Inc. stockholder approval and other customary closing conditions

Macquarie Asset Management, the asset management division of Macquarie Group (Macquarie) (ASX: MQG; ADR: MQBKY), today announced it has entered into an agreement to acquire all of the outstanding common shares of Waddell & Reed Financial, Inc., (Waddell & Reed) (NYSE: WDR) one of the oldest asset and wealth management companies in the US, for $US25.00 per share in cash, or total consideration of approximately $US1.7 billion ($A2.3 billion1).

On completion of the transaction, Macquarie has agreed to sell Waddell & Reed’s wealth management platform to LPL Financial Holdings Inc. (LPL) (Nasdaq: LPLA), a leading US retail investment advisory firm, independent broker-dealer and registered investment advisor custodian, and enter into a long-term partnership, with Macquarie becoming one of LPL’s top-tier strategic asset management partners.

As a result of the transaction, Macquarie Asset Management’s AUM are expected to increase to over $US465 billion ($A650 billion2), with the combined business becoming a top 253 actively managed, long-term, open-ended US mutual fund manager by assets under management, with the scale and diversification to competitively position the business to maintain and extend its high standards of service to clients and partners.

Through its subsidiaries, Waddell & Reed has provided investment management and wealth management services to clients throughout the US since 1937. Today, investment products are distributed under the IVY INVESTMENTS® brand, as well as through independent financial advisors associated with Waddell & Reed. As of September 30, 2020, Waddell & Reed’s asset management business had $US68 billion of AUM and its wealth management business had $US63 billion of AUA.

Martin Stanley, Head of Macquarie Asset Management, said: “The addition of Waddell & Reed and our enhanced partnership with LPL will significantly increase our ability to grow and invest in our combined business for the benefit of our clients. IVY INVESTMENTS’® complementary investment capabilities will provide diversification to Macquarie Asset Management’s capabilities and client base. The consideration offered reflects the quality of Waddell & Reed’s business and the future benefits of our partnership with LPL.”

Shawn Lytle, President of Delaware Funds® by Macquarie and Head of Macquarie Group in the Americas, added: “This transaction is an important step forward in our growth strategy for Delaware Funds® by Macquarie. The acquisition of Waddell & Reed’s asset management business and our partnership with LPL significantly strengthens our position as a top 253 actively managed, long-term, open-ended US mutual fund manager by assets under management across equities, fixed income and multi-asset solutions.”

Philip J. Sanders, Chief Executive Officer of Waddell & Reed Financial, Inc., said: “Over the past few years, we have been focused on leveraging our strong heritage as the foundation for transforming our firm into a more diversified and growth-oriented financial services enterprise. The long-term partnership between Macquarie and LPL as part of this transaction accelerates that transformation and ultimately will benefit our clients and independent Financial Advisors while delivering significant value to our stockholders.”

Dan Arnold, President and Chief Executive Officer of LPL Financial, said: “Waddell & Reed advisors are highly experienced and well-respected throughout the industry. They are a terrific fit both culturally and strategically, and we welcome them to the LPL family. Looking ahead, we expect our capabilities and resources will benefit their practices and help them unlock additional value and growth. Additionally, we look forward to deepening our long-term partnership with Macquarie, which will help us preserve unique aspects of the Waddell & Reed advisor experience while also positioning us to explore additional long-term opportunities together.”

The transaction has been approved by the Boards of Directors of Macquarie Group, LPL and Waddell & Reed and is expected to close by mid-2021, subject to regulatory approvals, Waddell & Reed stockholders approval and other customary closing conditions.

About Macquarie Asset Management

Macquarie Asset Management (MAM) is Macquarie's asset management business. MAM is a full-service asset manager, providing investment solutions to clients across a range of capabilities including infrastructure & renewables, real estate, agriculture, transportation finance, private credit, equities, fixed income, and multi-asset solutions. As at 30 September 2020, MAM had $A554.9 billion of assets under management. MAM has over 1,900 staff operating across 20 markets in Australia, the Americas, Europe and Asia. MAM has been managing assets for institutional and retail investors since 1980 in Australia and 1929 in the US, through a predecessor firm, formerly known as Delaware Investments. Delaware Funds® by Macquarie refers to certain investment solutions that MAM distributes, offers, refers, or advises.

About Waddell & Reed Financial, Inc.

Through its subsidiaries, Waddell & Reed Financial, Inc. has provided investment management and wealth management services to clients throughout the United States since 1937. Today, we distribute our investment products through the unaffiliated channel under the IVY INVESTMENTS® brand (encompassing broker/dealer, retirement, and registered investment advisors), our wealth management channel (through independent financial advisors associated with WADDELL & REED, INC.), and our institutional channel (including defined benefit plans, pension plans, endowments and subadvisory relationships).  For more information, visit ir.waddell.com.

About LPL Financial

LPL Financial (https://www.lpl.com) is a leader in the US retail financial advice market, the largest US independent broker/dealer(+) and a leading custodian (or provider of custodial services) to RIAs. We serve independent financial advisors and financial institutions, providing them with the technology, research, clearing and compliance services, and practice management programs they need to create and grow thriving practices. LPL enables them to provide objective guidance to millions of American families seeking wealth management, retirement planning, financial planning and asset management solutions.

+ Based on total revenues, Financial Planning magazine June 1996-2020.

Securities and Advisory Services offered through LPL Financial LLC, a Registered Investment Advisor. Member FINRA/SIPC. We routinely disclose information that may be important to shareholders in the “Investor Relations” or “Press Releases” section of our website.

  1. AUD/USD as at 1 Dec 20 of 0.7366.
  2. AUD/USD as at 30 Sep 20 of 0.7154.
  3. Source: Assets under management as of 30 Sep 20 - Based on data represented in Strategic Insight and Morningstar. Data includes ICI Method of Sales: Salesforce, Institutional and Retirement. Data excludes Variable Insurance Products, Closed End Funds, ETFs, passive mutual funds, Money Market Funds, Delaware Pooled Trusts, and Optimum Funds. Both Waddell & Reed and Macquarie Delaware are top 40 US active mutual fund managers by AUM as at 30 Sep 20.

 

Contacts

Sam Dobson
Macquarie Group Investor Relations
+61 2 8232 9986

Lisa Jamieson
Macquarie Group Media Relations
+61 2 8232 6016

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