52 Chief Investment Officer / December 2014 Chief Investment Officer / December 2014 53 WHAT IS Lured by the indexing business, the London Stock Exchange got a consultancy and asset manager in the bargain. So what happens to them? By the time you read this sentence, Russell Investments may be no more. If you read this in November, Russell will likely remain what its official biography claims it to be: an industry-leading asset management and servicing business with a global reach but humble Seattle roots. If you read this in December or beyond, that may not be the case. Sometime that month, insiders say, the London Stock Exchange (LSE)—which in June purchased the firm from North- western Mutual for $2.7 billion—will decide whether or not it wants to sell everything but Russell’s vastly profitable index business. According to multiple former and current Russell employees, this is exactly what it plans to do. In this scenario, a quick auction will see a private equity or non-American financial firm, looking for a foothold in the US market, take over the venerable remains of Russell. But whenever you read this, what you’ve been told about Russell Investments—its history, its people, its place in the market, and its future—is wrong. So what is Russell Investments? According to the official version, Russell is four things. It is a large and global consulting business, although one that is no longer accepting smaller clients and that the firm prefers to downplay in its marketing and public relations efforts. It has $2.4 trillion in assets under advisement, gathered over four decades in the industry—an industry, according to company lore, that George Russell (grandson of founder Frank Russell) pioneered. It is an investment manager. Besides defined contribution, multi-asset capabilities, and liabili- ty-focused expertise, this includes an outsourced chief investment officer (OCIO) service for institu- tional investors. By most measures, its OCIO business is the world’s largest, ranking ahead of SEI and Mercer in total assets under control. Overall, it manages $256 billion. Art by Jon Han /jon-han.com RUSSELL INVESTMENTS?

RUSSELL INVESTMENTS? - SIIA...By the time you read this sentence, Russell Investments may be no more. 1NaW]ZMIL\PQ[QV6W^MUJMZ :][[MTT_QTTTQSMTaZMUIQV_PI\Q\[W{KQITJQWOZIXPaKTIQU[Q\\W

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$Page 1: RUSSELL INVESTMENTS? - SIIA...By the time you read this sentence, Russell Investments may be no more. 1NaW]ZMIL\PQ[QV6W^MUJMZ :][[MTT_QTTTQSMTaZMUIQV_PI\Q\[W{KQITJQWOZIXPaKTIQU[Q\\W$

52 Chief Investment Officer / December 2014 Chief Investment Officer / December 2014 53

WHAT IS

Lured by the indexing business, the London Stock Exchange got a consultancy and asset manager in the bargain. So what happens to them?

By the time you read this sentence, Russell Investments may be no more. If you read this in November, Russell will likely remain what its official biography claims it to

be: an industry-leading asset management and servicing business with a global reach but humble Seattle roots.

If you read this in December or beyond, that may not be the case. Sometime that month, insiders say, the London Stock Exchange (LSE)—which in June purchased the firm from North-western Mutual for $2.7 billion—will decide whether or not it wants to sell everything but Russell’s vastly profitable index business. According to multiple former and current Russell employees, this is exactly what it plans to do.

In this scenario, a quick auction will see a private equity or non-American financial firm, looking for a foothold in the US market, take over the venerable remains of Russell.

But whenever you read this, what you’ve been told about Russell Investments—its history, its people, its place in the market, and its future—is wrong.

So what is Russell Investments? According to the official version, Russell is four things. It is a large and global consulting business, although one that is no longer accepting smaller

clients and that the firm prefers to downplay in its marketing and public relations efforts. It has $2.4 trillion in assets under advisement, gathered over four decades in the industry—an industry, according to company lore, that George Russell (grandson of founder Frank Russell) pioneered.

It is an investment manager. Besides defined contribution, multi-asset capabilities, and liabili-ty-focused expertise, this includes an outsourced chief investment officer (OCIO) service for institu-tional investors. By most measures, its OCIO business is the world’s largest, ranking ahead of SEI and Mercer in total assets under control. Overall, it manages $256 billion.

Art by Jon Han /jon-han.com

RUSSELLINVESTMENTS?