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New York Life to acquire minority stake in Cornerstone Capital Management


New York Life, through a subsidiary, is to acquire a minority stake in Cornerstone Capital Management, a Minneapolis-based large-cap growth manager with more than USD2.2bn in assets under management.

The terms of the agreement call for New York Life to increase its ownership over a period of seven years to a majority stake.

"Cornerstone has a strong track record of achieving long-term investment success for its clients. Its expertise in investing in large-cap growth equities complements our overall investment capabilities and positions us for growth," says Yie-Hsin Hung, senior managing director and head of institutional investments for the investments group of New York Life. "We are committed to making strategic acquisitions that enhance our investment boutiques with a focus on strategies sought by our clients."

Cornerstone manages the Keystone Large Cap Growth Fund and has a distinct philosophy of being a short-term contrarian within the context of long-term fundamental investing. The fund invests primarily in equity securities of US companies focusing on a relatively small number of intensively researched organisations. The fund typically invests at least 80 per cent of net assets in common stocks of high-growth large-capitalisation companies with at least USD3bn in market capitalisation. The fund typically will hold approximately 35 to 55 companies in various stages of growth.

Founded in 1992, Cornerstone is led by Andrew Wyatt, chief executive officer, and Thomas Kamp, president and chief investment officer. Prior to joining Cornerstone in 2006, Kamp managed more than USD9bn in assets at Alliance Capital Management.

"Partnering with one of America’s strongest and most well-regarded financial institutions is part of our strategic growth plan and provides increased opportunities for our clients and our team," says Wyatt. "This partnership enables Cornerstone to preserve its long-standing investment and management philosophies and continue its focus on performance while benefiting from New York Life’s global breadth and depth in distribution, marketing and service."

As part of this agreement, the investments group of New York Life also announced the formation of a new subadvisory partnership with Cornerstone and the proposed adoption of the Keystone Large Cap Growth Fund to the MainStay family of funds. The Keystone Large Cap Growth Fund, with USD330m in assets as of July 31, 2012, will be reorganised into the MainStay Funds and become the "MainStay Cornerstone Growth Fund" pending shareholder approval. MainStay Investments will become the investment manager to the new fund and Cornerstone will be sub-advisor to the fund. Cornerstone will continue to be responsible for the day-to-day portfolio management of the fund.

The parties expect to close the transaction on or about 13 January 2013.

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