Zurich share funds unaffected by ownership change

Standard & Poor’s (S&P) ratings on the Zurich Investments Global Growth Share Fund and Zurich Investments Unhedged Global Growth Share Fund will remain unaffected by the change in third-party ownership for the investment manager, American Century Investments.

S&P’s ratings announcement follows news that the Canadian Imperial Bank of Commerce (CIBC) is to acquire 41 per cent economic interest in the American Century Investments, which is currently held by JPMorgan Chase & Co.

The transaction, announced earlier this month, will provide American Century, a Kansas-based investment firm managing approximately US$12 billion in assets (as at June 30), with a strategic partnership with one of Canada’s largest financial institutions with more than US$400 billion in assets (as at April 30).

The acquisition will make CIBC a financial investor only in American Century. It will have two representatives of the 10-member board, and it will hold just over 10 per cent of voting rights.

JPMorgan Chase has held a non-controlling equity interest in American Century since January 1998, when it purchased a 45 per cent stake. The purchase gave American Century founder James Stowers Jr the liquidity required to establish the Stowers Institute for Medical Research, a biomedical research organisation.

The new CIBC acquisition will not change control of American Century, and the Stowers Institute will remain the controlling shareholder.

American Century currently implements Zurich Investments’ Global Growth Share Fund and Zurich Investments Unhedged Global Growth Share Fund.