MBIA Inc. Completes Merger of Its Investment Business With 1838 Investment Advisors.
Located in Radnor, Pa., 1838 is a full-service asset management firm with a strong institutional focus. The company manages over $6 billion in equity, fixed-income and balanced portfolios for a client base comprised of high-net-worth individuals, municipalities, endowments, foundations and corporate employee-benefits plans. 1838 acts as investment advisor to 1838 Investment Advisors Funds and 1838 Bond Debenture Trading Fund.
1838 will be part of a newly formed holding company, MBIA Asset Management Corporation, which consolidates MBIA's investment management operations. W. Thacher Brown, chairman, president and chief executive officer of 1838, was named president of MBIA Asset Management, which has over $21 billion of assets under management.
The transaction is structured as a tax-free exchange and accounted for as a "pooling of interests." MBIA expects the acquisition to be non-dilutive to 1998 earnings per share, excluding merger-related costs, and accretive thereafter.
Gary C. Dunton, president, MBIA Investment Management and Financial Services Division, said, "By merging 1838's strong equity management capabilities with MBIA's fixed-income capabilities, we are significantly enhancing our ability to serve the investment needs of our clients. The new holding company will enable MBIA to take advantage of synergistic marketing opportunities that exist among our investment management businesses."
MBIA Asset Management comprises MBIA's investment management products and services: pooled local government cash management (CLASS); guaranteed investments for bond proceeds; fixed-income and equity management and customized investment advisory services.
The new president of MBIA Asset Management, Mr. Brown has been president, chief executive officer and chairman of the board of 1838 Investment Advisors since 1988. He also serves as director of the 1838 Bond-Debenture Trading Fund, and Airgas Inc., both of which are listed on the New York Stock Exchange, as well as The Harleysville Mutual Insurance Company and the 1838 Investment Advisors International and Small Cap Funds. Before joining 1838, Mr. Brown was with Drexel Burnham Lambert Investment Advisors and the capital management department of Smith Barney. He is a graduate of Princeton University and the Wharton School of Finance & Commerce at the University of Pennsylvania.
MBIA Inc., through its subsidiaries, is the world's preeminent financial guarantor and a leading provider of specialized financial services. MBIA provides innovative and cost-effective products and services that meet the credit enhancement, financial and investment needs of its public and private clients, domestically and internationally. MBIA Insurance Corporation has a claims-paying rating of Triple-A from Moody's Investors Service, Standard & Poor's Ratings Services and Fitch IBCA. Please visit MBIA's web site at http://www.mbia.com.
CONTACT: Michael Ballinger