St. Louis-based broker/dealer Edward Jones announced it intends to acquire Natixis Investment Managers’ overlay management services capabilities “through the purchase of select assets and an exclusive license for certain proprietary technology.”
When the deal closes, Edward Jones will become the overlay manager for its UMA business, something it is currently outsourcing to Natixis. Natixis, however, will continue to provide direct indexing services to Edward Jones. The terms of the deal were not disclosed. Edward Jones has over $50 billion in assets in its UMA business.
Overlay management services implement clients’ investments through a professionally managed diversified portfolio, including tax strategies.
“Bringing these services in-house gives us greater flexibility to innovate based on the needs of our clients,” Edward Jones Principal Russ Tipper said in a statement. “We believe that this integration will further strengthen our competitive advantage by building deeply personalized client portfolios, focusing on what is unique to each client. Additionally, we expect that these services will create scale and efficiency for our branch teams, which can increase our financial advisors’ capacity to serve more clients more completely.”
Edward Jones and Natixis IM have worked together since 2011. As part of the transaction, Edward Jones is extending offers of employment to some Natixis IM associates working in overlay management services.
“We are excited to transition to a strategic way of working with our long-time client combining our UMA implementation knowledge, industry-leading direct-indexing prowess and investment management expertise with Edward Jones’ comprehensive financial planning and investment management capabilities to benefit investors’ unique needs and preferences,” David Giunta, president and CEO for the U.S. at Natixis IM, said in a statement.
It’s the latest move by Edward Jones to beef up its investment management capabilities and to serve high-net-worth clients.
In March, the firm announced Edward Jones Generations, a set of private client services explicitly designed for high-net-worth clients in the United States. In April, it announced that private assets would be part of that business.
Last October, the firm launched its own professionally managed SMA, focusing primarily on U.S.-based large cap stocks, available exclusively to clients enrolled in Edward Jones’ existing UMA program. It marked a departure for the firm, which previously only offered SMAs from third-party managers.
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