People's United Bank subsidiary People's Securities has agreed to purchase Gerstein Fisher, a New York City-based investment management firm with a $3bn, for an undisclosed amount.
Gerstein Fisher, which is founded in 1993, serves individuals and families, institutions, and third-party platforms. It manages assets using a quantitative Multi-Factor approach, which structures portfolios to overweight the factors that academic research has identified as having the potential to deliver enhanced returns..
The deal is expected to bring People's United Wealth Management's total assets under administration to nearly $20bn, of which nearly $8bn is under discretionary management.
Subject to customary approvals, the deal is expected to close during the fourth quarter of 2016. The lender expects the transaction to be modestly accretive to earnings in 2017 with an Internal rate of return (IRR) of over 15%.
People's United Bank president and CEO Jack Barnes said: "Gerstein Fisher's well-known quantitative investment approach and scalable technology-enabled platform will build upon the excellent range of investment solutions offered by People's United.
"The transaction supports recent strategic investments in our fee income businesses and strengthens our New York franchise. We are extremely pleased to welcome this respected firm to the People's Securities and Wealth Management teams."
Additionally, as part of the deal, Gerstein Fisher founder and CIO Gregg Fisher will join People's United as head of quantitative research and portfolio strategy.
Commenting on the acquisition, Fisher said: "We're very excited to join forces with People's United, as both companies share similar cultures, outstanding client relationships and strong investment performance.
"We believe that our investment strategies, combined with People's United's large distribution network, will allow us to help more people invest smartly to achieve their goals than Gerstein Fisher could have on a standalone basis."