New York Life Investment Management announced Thursday that it has agreed to purchase Chicago-based institutional investment firm Institutional Capital Corporation. Subject to board and shareholder approval, ICAP's three mutual funds -- the ICAP Equity Fund, the ICAP Select Equity Fund, and the ICAP International Fund -- will join NYLIM's MainStay family of funds, but ICAP will operate independently within NYLIM.

ICAP currently holds over $14 billion in assets under management, while NYLIM has more than $200 billion.

Christopher Blunt, executive vice president of retail investments at NYLIM and president of the MainStay Funds, told the MFWire that the deal is part of NYLIM's ongoing effort to invest in its mutual fund business, which includes rounding out and adding depth to the mutual fund line-up. "About two years ago I joined with a very clear mandate ... that we see the mutual fund business as a clear opportunity," he said. Initiatives to enhance marketing and distribution, such as adding wholesalers and improving technology, have seen MainStay's fund sales "pretty much doubled" in the two years.

"This is perfect timing in terms of a catalyst," he said of the ICAP agreement. "This adds additional top-rated funds to the line-up," especially in the important international and large-cap value areas, he explained, adding that the purchase "met with a resounding cheer from our wholesaling team today."

A news release said the deal is expected to close on or about June 30. A spokesperson for NYLIM confirmed the terms of the deal are not being disclosed.

In a statement, ICAP president and CIO Robert Lyon commented, "ICAP will continue to focus on its institutional business, while the ICAP funds will benefit from NYLIM's vast resources and multiple distribution channels."

Blunt agreed that NYLIM offers ICAP distribution and marketing capacity, and confirmed NYLIM will not interfere with ICAP's "very high quality institutional money managers ... it would be foolish of us to try to monkey with that at all," he said.  

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