The Principal Financial Group (The Principal) has gotten closer to their goal of being a pension and long term investment leader in Brazil with the announcement last week that they entered into an agreement to purchase a 60% indirect ownership of Claritas Investments Ltd. (Claritas).
Claritas has more than $1.8 billion in assets under management. The Sao Paulo-based company manages equity funds, balanced funds, managed accounts among other strategies for their clients and institutions through a multi-channel distribution network.
It is, however, not the first time that Des Moines IA-based retirement and investment manager has penetrated the Brazilian market. Since 1999, The Principal has offered pension and annuity products through Brasilprev, a joint venture operation they have with Banco do Brasil.
“Entering the Brazilian mutual fund and asset management market has long been a strategic priority for The Principal and we are pleased to partner with the talented team at Claritas. The company’s strong management team, solid investment track record, value added products for Brazilians and potentially international customers and diversified distribution through financial advisors are all important comptetencies as we continue to grow our mutual fund and asset management business in Latin America,”said Luis Valdes, president and CEO of Principal Interantional.
The announcement falls in line with The Principal’s plan to deploy $800 to $900 million of capital in 2012 and it is in addition to the $154 million planned for 2012. Shares of Principal Financial Group rose 30 cents or 1.1 percent to $27.96 on March 1, 2012, the day of the announcement. The Claritas transaction is expected to be earnings per share neutral in 2012 and accretive to EPS and return on equity thereafter. The deal is expected to close in April.