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Federated Investors, Inc. Completes Acquisition of Certain Investment-Related Assets from PNC Bank, N.A.

- Federated obtains approximately $14 billion in assets

- International equity team responsible for strong historical performance joins Federated

PITTSBURGH, Nov. 19, 2019 /PRNewswire/ -- Federated Investors, Inc. (FII), a leading global investment manager, today announced the acquisition of certain components of the PNC Capital Advisors LLC (PCA) investment management business. The transaction involved the reorganization of 18 PNC equity, fixed-income and liquidity mutual funds into 16 corresponding Federated mutual funds and the transition of a five-person Cleveland-based international equity portfolio management team from PCA to Federated. The acquisition also included a portion of PCA's separate account and separately managed account businesses.

The reorganization of $14.0 billion in assets comprised approximately $11.3 billion in liquidity assets, $2.3 billion in equity assets and $450 million in fixed-income assets. Each mutual fund reorganization was approved by PNC fund shareholders.

"This transaction builds upon Federated's long-term relationship with PNC and provides the shareholders of the funds and other PNC customers access to Federated's diverse range of investment strategies, proven performance and extensive customer service capabilities. Federated continues to seek alliance and acquisition opportunities in the U.S. and throughout the world," said J. Christopher Donahue, president and chief executive officer of Federated Investors. "We also are pleased to offer the strong historical performance of the international funds to our customers as complements to our existing range of international equity options."

The three fundamentally driven international equity funds that are now part of the Federated complex inherit the performance established by the Cleveland-based investment management team. Led by Martin Schulz, senior vice president and head of the international growth team, the team averages 13 years of industry experience and 11 years working together. Polaris Capital Management had served as sub-advisor to the value component of the PNC International Equity Fund and has been retained as sub-advisor for the Federated International Equity Fund.

The $1.6 billion Federated International Equity Fund has earned an overall 4-star rating from Morningstar performance for I Shares in the Foreign Large Growth category. The $5 million Federated International Growth Fund has an overall 4-star Morningstar rating for A, I and R6 Share classes out of 396 funds in the same Morningstar category, as of Sept. 30, 2019.

Federated will pay PCA an estimated total purchase price of approximately $56 million for the acquisition.

The liquidity, equity and fixed-income fund transitions are shown below:

Liquidity Fund Transitions


PNC Funds

Acquired

Net Assets

 (millions)*

Federated Funds

PNC Government Money Market Fund

$9,483

Federated Government Obligations Fund

PNC Treasury Money Market Fund

$1,499

Federated U.S. Treasury Cash Reserves Fund

PNC Treasury Plus Money Market Fund

$305

Federated Treasury Obligations Fund


*As of Nov. 15, 2019

 

Equity and Fixed-income Fund Transitions


PNC Funds

Acquired

Net Assets

 (millions)*

Federated Funds

Share
Class

Overall
Morningstar
Rating

Morningstar
Category/

Number

of Funds

PNC International Equity

$1,610

(New) Federated
International Equity

A

C

IS

R6

***†

***†

****†

****†

Foreign
Large
Growth/

396

PNC Ultrashort Bond Fund

$201

Federated Ultrashort
Bond Fund

IS

****

Ultrashort
Bond/

154

PNC Multi-Factor Small
Cap Core

$116

Federated MDT Small
Cap Core

A

C

IS

R6

****

***

****

***

Small Blend/

640

PNC Total Return
Advantage

$143

Federated Total Return
Bond

IS

SS

***

***

Intermediate-
Term Bond/

901

PNC Small Cap

$114

Federated MDT Small
Cap Core

A

C

IS

****

***

****

Small Blend/

640

PNC Multi-Factor Small
Cap Growth

$103

Federated MDT Small
Cap Growth

A

C

IS

R6

***

***

****

***

Small
Growth/

584

PNC Multi-Factor Large
Cap Value

$110

Federated MDT Large
Cap Value

A

C

IS

***

***

***

Large Value/

1,096

PNC Multi-Factor Large
Cap Growth

$102

Federated MDT Large
Cap Growth

A

C

IS

***

**

***

Large Blend/

1,256

PNC Tax Exempt Limited
Maturity Bond

$72

Federated Short-
Intermediate Duration

Municipal Trust

IS

SS

****

***

Municipal
National
Short/

179

PNC Intermediate Tax
Exempt Bond

$34

Federated Intermediate
Municipal Trust

IS

SS

***

***

Municipal
National
Intermediate/

258

PNC Balanced Allocation

$11

Federated MDT
Balanced

A

C

IS

***

***

****

Allocation –
50% to 70%/

658

PNC Multi-Factor Small
Cap Value

$14

Federated MDT Small
Cap Core Fund

A

C

IS

****

***

****

Small Blend/

640

PNC Emerging Markets
Equity

$13

(New) Federated
Emerging Markets
Equity

IS

PNC Multi-Factor All Cap

$5

Federated MDT All Cap
Core

A

C

IS

****

****

****

Large Value/

1,090

PNC International Growth

$5

(New) Federated
International Growth

A

IS

****†

****†

Foreign
Large
Growth/

396


Morningstar rankings are for current equivalent PNC fund share class as of Sept. 30, 2019.
Ratings are based on risk-adjusted total return as of 9/30/2019. The overall rating is derived from a weighted average of the
fund's 3-, 5- and 10-year average annual returns as applicable. Past performance is no guarantee of future results.

 

Federated Investors, Inc. is a leading global investment manager with $527.2 billion in assets under management as of Sept. 30, 2019. Our investment solutions span 131 equity, fixed-income, alternative/private markets, multi-asset and liquidity management strategies and a range of separately managed account strategies. Providing comprehensive investment management to more than 11,000 institutions and intermediaries, our clients include corporations, government entities, insurance companies, foundations and endowments, banks and broker/dealers. Headquartered in Pittsburgh, Federated's nearly 1,900 employees include those in New York, Boston, London and several other offices worldwide. In 2018, Federated acquired a majority interest in Hermes Investment Management, which provides world-class active management and stewardship services. For more information, visit FederatedInvestors.com.

###

Certain statements in this press release, such as those related to Federated's efforts to seek alliance and acquisition opportunities and payment of deal consideration, constitute forward-looking statements, which involve known and unknown risks, uncertainties and other factors that may cause the actual results, levels of activity, performance or achievements of the company or industry results to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. Among other risks and uncertainties is the ability of Federated to identify and complete suitable acquisitions, and the risk factors discussed in the company's annual and quarterly reports as filed with the Securities and Exchange Commission. As a result, no assurance can be given as to future results, levels of activity, performance or achievements, and neither the company nor any other person assumes responsibility for the accuracy and completeness of such statements in the future.

Morningstar Category identifies funds based on their actual investment styles as measured by their underlying portfolio holdings over the past three years. If the fund is less than three years old, the category is based on the life of the fund. ©2019 Morningstar, Inc. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results. The Morningstar Rating™ for funds, or "star rating", is calculated for managed products (including mutual funds, variable annuity and variable life subaccounts, exchange-traded funds, closed-end funds, and separate accounts) with at least a three-year history. Exchange-traded funds and open-ended mutual funds are considered a single population for comparative purposes. It is calculated based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a managed product's monthly excess performance, placing more emphasis on downward variations and rewarding consistent performance. The top 10% of products in each product category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars, and the bottom 10% receive 1 star. The Overall Morningstar Rating for a managed product is derived from a weighted average of the performance figures associated with its three-, five-, and 10-year (if applicable) Morningstar Rating metrics. The weights are: 100% three-year rating for 36-59 months of total returns, 60% five-year rating/40% three-year rating for 60-119 months of total returns, and 50% 10-year rating/30% five-year rating/20% three-year rating for 120 or more months of total returns. While the 10-year overall star rating formula seems to give the most weight to the 10-year period, the most recent three-year period actually has the greatest impact because it is included in all three rating periods. Ratings do not take sales charges into account.

Federated International Equity Fund was rated against the following numbers of U.S.-domiciled Foreign Large Growth funds over the following time periods. Ratings are for A, C, IS and R6 Shares; other classes may have different performance characteristics. For the 3-, 5- and 10-year periods ended 9/30/19, the fund's A Shares received 3, 3 and 3 stars, the fund's C Shares received 3, 3 and 3 stars, the fund's Institutional Shares received 3, 3 and 4 stars, and the fund's R6 Shares received 3, 3 and 4 stars and was rated among 396, 340 and 247 funds, respectively.

Federated International Growth Fund was rated against the following numbers of U.S.-domiciled Foreign Large Growth funds over the following time periods. Ratings are for IS and A Shares; other classes may have different performance characteristics. For the 3-year period ended 9/30/19, the fund's A and Institutional Shares received 4 and 4 stars and was rated among 396 and 396 funds, respectively. Past performance is no guarantee of future results.

Federated MDT Small Cap Core Fund was rated against the following numbers of U.S.-domiciled Small Blend funds over the following time periods. Ratings are for A, C, IS and R6 Shares; other classes may have different performance characteristics. For the 3-, 5- and 10-year periods ended 9/30/19, the fund's A Shares received 3, 4 and 4 stars, the fund's C Shares received, 2, 3 and 3 stars, the fund's Institutional Shares received 3, 4 and 4 stars, and the fund's R6 Shares received 3, 4 and 4 stars, and was rated among 640, 508 and 371 funds, respectively. Past performance is no guarantee of future results.

Federated Ultrashort Bond Fund was rated against the following numbers of U.S.-domiciled Ultrashort Bond funds over the following time periods. Ratings are for Institutional Shares; other classes may have different performance characteristics. For the 3-, 5- and 10-year periods ended 9/30/19, the fund's Institutional Shares received 4, 4 and 4 stars, and was rated among 154, 130 and 57 funds, respectively. Past performance is no guarantee of future results.

Federated Total Return Bond Fund was rated against the following numbers of U.S.-domiciled Intermediate-Term Bond funds over the following time periods. Ratings are for Institutional Shares and Service Shares; other classes may have different performance characteristics. For the 3-, 5- and 10-year periods ended 9/30/19, the fund's Institutional Shares received 3, 4 and 3 stars, and the fund's Service Shares received 3, 3 and 2 stars and was rated among 539, 448 and 332 funds, respectively. Past performance is no guarantee of future results.

Federated MDT Small Cap Growth Fund was rated against the following numbers of U.S.-domiciled Small Growth funds over the following time periods. Ratings are for A, C, Institutional and R6 Shares; other classes may have different performance characteristics. For the 3-, 5- and 10-year periods ended 9/30/19, the fund's A Shares received 3, 3 and 3 stars, the fund's C Shares received, 2, 3 and 3 stars, the fund's Institutional Shares received 3, 4 and 4 stars, and the fund's R6 Shares received 3, 4 and 4 stars, and was rated among 584, 519 and 399 funds, respectively. Past performance is no guarantee of future results.

Federated MDT Large Cap Value Fund was rated against the following numbers of U.S.-domiciled Large Value funds over the following time periods. Ratings are for A, C and Institutional Shares; other classes may have different performance characteristics. For the 3-, 5- and 10-year periods ended 9/30/19, the fund's A Shares received 3, 3 and 3 stars, the fund's C Shares received 2, 2 and 3 stars, and the fund's Institutional Shares received 3, 3 and 4 stars, and was rated among 1,090, 944 and 693 funds, respectively. Past performance is no guarantee of future results.

Federated MDT Large Cap Growth Fund was rated against the following numbers of U.S.-domiciled Large Blend funds over the following time periods. Ratings are for A, C and Institutional Shares; other classes may have different performance characteristics. For the 3-, 5- and 10-year periods ended 9/30/19, the fund's A Shares received 4, 3 and 3 stars, the fund's C Shares received, 4, 2 and 2 stars and the fund's Institutional Shares received 4, 3 and 3 stars and was rated among 1,243, 1,110 and 822 funds, respectively. Past performance is no guarantee of future results.

Federated Short-Intermediate Duration Municipal Trust was rated against the following numbers of U.S.-domiciled Municipal National Short funds over the following time periods. Ratings are for Institutional Shares and Service Shares; other classes may have different performance characteristics. For the 3-, 5- and 10-year periods ended 9/30/19, the fund's Institutional Shares received 4, 4 and 4 stars, and the fund's Service Shares received 3, 3 and 3 stars and was rated among 179, 162 and 117 funds, respectively. Past performance is no guarantee of future results.

Federated Intermediate Municipal Trust was rated against the following numbers of U.S.-domiciled Municipal National Intermediate funds over the following time periods. Ratings are for Institutional Shares and Service Shares; other classes may have different performance characteristics. For the 3-, 5- and 10-year periods ended 9/30/19, the fund's Institutional Shares received 3, 3 and 3 stars, and the fund's Service Shares received 3, 3 and 3 stars and was rated among 244, 217 and 149 funds, respectively. Past performance is no guarantee of future results.

Federated MDT Balanced Fund was rated against the following numbers of U.S.-domiciled Allocation—50% to 70% Equity funds over the following time periods. Ratings are for A, C, and Institutional Shares; other classes may have different performance characteristics. For the 3-, 5- and 10-year periods ended 9/30/19, the fund's A Shares received 4, 3 and 3 stars, the fund's C Shares received 4, 3 and 2 stars, the fund's Institutional Shares received 4, 4 and 3 stars, and was rated among 658, 581 and 427 funds, respectively. Past performance is no guarantee of future results.

Federated MDT All Cap Core Fund was rated against the following numbers of U.S.-domiciled Large Value funds over the following time periods. Ratings are for A, C, and Institutional Shares; other classes may have different performance characteristics. For the 3-, 5- and 10-year periods ended 9/30/19, the fund's A Shares received 5, 4 and 4 stars, the fund's C Shares received, 5, 4 and 3 stars, and the fund's Institutional Shares received 5, 4 and 4 stars, and was rated among 1,090, 944 and 693 funds, respectively. Past performance is no guarantee of future results.

Federated Securities Corp. is distributor of the Federated funds.


Investors should carefully consider each fund's investment objectives, risks, charges and expenses before investing. To obtain a summary prospectus or prospectus containing this and other information, contact us or view the prospectus provided at FederatedInvestors.com. Please carefully read the summary prospectus or prospectus before investing.

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