Babson Capital to combine subsidiaries under Barings name

Babson Capital Management is to combine its business with that of its subsidiaries Cornerstone Real Estate Advisers, Wood Creek Capital Management and Baring Asset Management into one firm under the Barings brand.

The amalgamation of the businesses, which are all affiliates of the MassMutual Financial Group (a marketing name for the Massachusetts Mutual Life Insurance Company), will create an international, multi-asset investment manager with more than $260bn (€183bn) in assets under management, the companies announced jointly.

Tom Finke, chairman and chief executive at Babson, said: “As a unified firm, we will be better able to deliver our diverse and global investment offerings to clients.”

Finke will head up the new company whose headquarters will be in Charlotte, North Carolina in the US.

David Brennan, meanwhile, chairman and chief executive of Barings for the last 14 years, will retire as planned this summer.

The companies said they did not expect investment leadership to be changed at the combined firm because the the investment areas involved were complementary.

But distribution and marketing capabilities will be combined to support the new company, they said.

They expect the first phase of integration to be finished in the fourth quarter of 2016, subject to regulatory approval.

The decision to use the Barings brand and logo for the combined company reinforces the “global aspect of the new firm, the diversified nature of its client base and the Barings heritage that dates back to 1762”, the companies said.

Both brand and logo will be “refreshed to reflect the global nature of the new Barings and signify the unified platform of the affiliates,” according to the announcement.

The Barings name stems from its origins within Barings Bank, a longstanding English merchant bank that collapsed in 1995. 

It had suffered huge losses from speculative investments in a high-profile scandal involving Singapore-based employee Nick Leeson.

The bank was then sold to Dutch bank ING, which in 2005 sold the investment management activities of Baring Asset Management and the rights to use the Baring Asset Management name to MassMutual. 

Babson Capital Management, which focuses on corporate debt, has €82.8bn in assets managed on behalf of external institutional clients, according to end-2015 data collected by IPE, with €20.7bn of this for European clients.

London-based Barings has total assets under management of €32.4bn, of which €23.1bn is for external institutional clients, according to IPE data.

Of this, €6bn is managed on behalf of European institutional clients.

Casey Quirk advised on the corporate restructuring.