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Ivy Funds' Parent Sells After a Challenging Period

Fund mergers and consolidations are possible after the deal closes.

On Dec. 2, 2020, Waddell & Reed WDR, the parent company of Ivy Investments, announced that it would be acquired by Macquarie Asset Management and expects the deal to close in mid-2021. This news doesn't immediately affect Ivy's Average Parent rating or any strategy's Morningstar Analyst Rating.

Until the deal closes, Ivy expects to keep in place its current products and portfolio management teams. Thereafter, Macquarie plans to review its lineup and leaves open the possibility of a consolidation of Ivy funds or some other shakeup. Macquarie owns the U.S.-based Delaware Funds, which offers many strategies that overlap with or are similar to offerings in Ivy's lineup.

The announcement comes after an eventful and challenging six years for Ivy. The firm has struggled to get back on its feet since 2014, when an exodus of prominent members from its funds' management and research teams began in earnest and subsided in 2018. Combined with mediocre fund performance and above-average fees charged across the complex, a raft of outflows ensued. The firm's leadership--most of whom are still relatively new to their roles--has made strides to improve the situation by rebuilding the investment team, reducing fees on some products, and merging funds.

Macquarie Asset Management is a division of Macquarie Group, a global diversified financial firm based in Australia. It earns an Above Average Parent rating for its fundholder-aligned compensation philosophy and thoughtful approach to product development. Upon completion of its acquisition of Waddell & Reed, the firm expects its assets under management to climb to over $465 billion.

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About the Author

Robby Greengold, CFA

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Robby Greengold is a strategist for Morningstar Research Services LLC, a wholly owned subsidiary of Morningstar, Inc. He has covered equity strategies run by asset managers including Fidelity, Primecap, and ARK.

Greengold worked in corporate finance and investment research roles prior to joining Morningstar in 2017. He holds a bachelor's degree in music composition from the University of California, Santa Barbara and a Master of Business Administration from the Lubar School of Business at the University of Wisconsin-Milwaukee. He also holds the Chartered Financial Analyst® designation.

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