B Capital and Calpers to Acquire Russell Investments for $2.8 Billion in AI-Focused Deal

A group of investors led by venture firm B Capital Group and the California Public Employees’ Retirement System (Calpers) has agreed to acquire asset manager Russell Investments for $2.8 billion. The deal is intended to modernize the 90-year-old firm by integrating artificial intelligence into its investment processes, according to a report from Bloomberg, which cited a person with knowledge of the matter.

The Acquisition Details

The transaction values Russell Investments, which manages $416 billion in assets, at more than double its last sale price. The deal is subject to regulatory approval and is expected to be finalized early next year. B Capital was co-founded by billionaire Eduardo Saverin and former Bain Capital investor Raj Ganguly.

• Acquisition Price: $2.8 billion
• Target's AUM: $416 billion
• Lead Investors: B Capital Group, Calpers

This acquisition marks a significant exit for private equity firms TA Associates Management and Reverence Capital Partners, which took Russell Investments private for $1.15 billion roughly a decade ago when it managed approximately $270 billion.

A Strategic Bet on AI

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The buyers have stated that a key motivation for the acquisition is to leverage technology to enhance investment and retirement solutions. "We’ve always believed that the way that people save and invest for retirement can be improved by leveraging AI," B Capital's Raj Ganguly said in an interview with Bloomberg, adding, "But you can’t remove the human element from it."

Ganguly also told Bloomberg that B Capital had long considered an investment in the asset management sector, noting that investors are "systematically underserved." The firm chose to back an established manager with trusted client relationships rather than a new robo-advisory business. Echoing the tech-forward strategy, Calpers’ Deputy Chief Investment Officer Anton Orlich said in a statement that the acquisition is a "compelling opportunity to build a next-generation asset manager."

Market Context

Based in Seattle, Russell Investments provides a range of stock and bond funds and operates one of the industry’s largest outsourced chief investment officer (OCIO) businesses. The firm has demonstrated strong performance recently, with organic growth of more than 15% over the last two years from new client capital, according to the report.