Northwestern Mutual Life Expected to Buy Russell Co.

Northwestern Mutual Life Insurance Co. plans to acquire Frank Russell Co., the world’s biggest consultant to pension funds and other institutional investors, a person familiar with the situation said, and the transaction could be announced today.

Milwaukee-based Northwestern, the fifth-biggest U.S. life insurer, is likely to pay about $1.2 billion for closely held Russell, analysts said. Russell advises institutions and individuals with more than $1 trillion in assets worldwide and also compiles stock indexes such as the Russell 2000, a benchmark for small companies.

Spokespeople for Northwestern and Tacoma, Wash.-based Russell declined to comment on the report.

Northwestern’s emergence as Russell’s acquirer comes as a surprise to many industry observers because the insurance company has avoided purchases during a period of record takeovers in the financial services industry. Its last acquisition, of regional investment bank Robert W. Baird & Co., was made in 1982.

Russell, founded 62 years ago by the grandfather of Chairman George Russell, is selling itself for estate planning reasons.

Russell hired New York investment bank Goldman, Sachs & Co. in April to review options, including a sale to another company or in a public offering.

Russell, which has a staff of about 1,400, will continue to operate its global headquarters in Tacoma, according to people familiar with the situation.

Northwestern’s acquisition of Russell was first reported in the weekend edition of the Financial Times, which didn’t cite sources.

Northwestern has $71 billion in assets and $13 billion in revenue. It is owned by its policyholders.