Northern Trust plans to increase the capital support levels so its money market and cash funds don’t fall below US$1.
The capital support levels will rise to a maximum capital contribution of $550 million, an increase of $321 million.
The company will also provide support for securities lending clients whose cash collateral is investing in five constant dollar, commingled investment pools negatively impacted by recent market events.
And Northern Trust will put in place a program offering to purchase certain illiquid auction rate securities.
The firm expects to incur pre-tax charges of about $525 million in the third quarter in connection with these three actions.
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Fortis Rescued
The governments of Belgium, Luxembourg and the Netherlands have agreed to invest €11.2 billion (C$16.9 billion) in Fortis. Each will hold a 49% stake in the Fortis bank in their country.
The actions taken by the three governments are a sign of confidence in Fortis, says the company’s CEO-elect, Filip Dierckx. “These actions ensure the financial strength and stability of our company going forward.”
Shares of the financial services company have dropped more than 80% over the past year as the credit crisis worsened.
Fortis has also agreed to sell its interest in the Dutch ABN Amro assets—excluding the asset management division—that it acquired as part of an RBS-led consortium.
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Sun Life Makes U.S. Management Changes
Sun Life Financial has recruited talent from a rival to lead its operations in the United States.
Next month, Jon Boscia will join as president and be responsible for the company’s overall U.S. business, apart from MFS, and oversee worldwide marketing.
He retired from Lincoln Financial Group in August 2007, where he served as that company’s chief executive for 10 years.
Boscia replaces Robert Salipante, who has been appointed president of SLF International.
Also joining Boscia’s team are Westley Thompson as president of SLF U.S. and Terrence Mullen as president of Sun Life Financial Distributors. Thomson will be responsible for the SLF U.S. business lines while Mullen will oversee distribution, including the distribution aspects of Sun Life’s Employee Benefits Group, life and annuities products and services.
Both Thomson and Mullen join Sun Life from Lincoln Financial.
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Neuberger Sold to Private Equity Firms
Private equity firms Bain Capital Partners and Hellman & Friedman have agreed to buy Neuberger Berman and certain asset management businesses of Lehman Brothers for US$2.15 billion.
As part of the transaction, a new, independent investment management company—to be named Neuberger Investment Management—will be created comprising businesses that managed more than $230 billion of assets as of Aug. 31, 2008.
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Neuberger Berman will be its largest operating unit, and together with the fixed income and alternative asset management businesses, will form the core of this investment management company.
The transaction is expected to be completed by early 2009 and is subject to satisfaction of certain closing conditions, including the Lehman Brothers Holdings bankruptcy court approval.
Lehman filed for bankruptcy protection earlier this month.