Liberty Financial May Put Itself Up for Sale

Liberty Financial Cos., owner of the Stein Roe & Farnham mutual funds, said it is considering strategic options, including putting itself up for sale. Liberty Financial, which is 70% owned by giant insurer Liberty Mutual, could fetch around $2 billion and attract interest from a host of U.S. and foreign financial-service firms, industry sources said. Shares of Liberty Financial jumped $9, or 33%, to close at $36 on the New York Stock Exchange, giving the company a market value of about $1.7 billion. Boston-based Liberty Financial, which sells annuities and mutual funds and manages investments for other companies, said it hired CS First Boston to explore its options. The company also announced a restructuring of its mutual fund business and said it agreed to sell its Chicago-based Private Capital Management division of Stein Roe & Farnham to the management team at Private Capital and an outside investor group for $40 million. A Liberty Mutual spokesman declined immediate comment about whether the company might consider buying back the 30% of Liberty Financial that it does not already own.