McKinsey sells in-house asset manager MIO Partners to Neuberger

McKinsey & Company has agreed to sell MIO Partners, a subsidiary that invests the private wealth of its employees and alumni, to Neuberger Berman Group, a New York-based investment manager.

The sale agreement arrives one year after McKinsey hired investment bank Ardea Partners to perform a strategic review of MIO. The New York-based management consultancy said the review was prompted by MIO’s significant growth and expansion in the last 25 years.

The US Securities and Exchange Commission in 2021 fined McKinsey $18 million over allegations MIO had inadequate controls to prevent the use of insider information from McKinsey’s consulting work.

MIO was created in the 1980s to support McKinsey’s retirement plan. The subsidiary today has approximately 250 people managing retirement and after-tax investment for 30,000 McKinsey partners, employees, and alumni.

MIO has $26 billion in assets under management, including approximately $20 billion in alternative investment strategies.

Neuberger will onboard MIO’s investment teams for alternative investments strategies and its advisory business that serves McKinsey partners, as well as associated supporting functions.

The transaction is expected to close this year.

“We are honored to be selected by McKinsey to be their partner in preserving and protecting MIO’s special capabilities,” said George Walker, chairman and CEO of Neuberger. “Neuberger and McKinsey share strong cultural alignment as private, employee-owned firms with a singular focus on serving the long-term interests of clients.”

Neuberger manages $563 billion of equities, fixed income, private equity, real estate, and hedge fund portfolios. The firm has 3,000 people across 27 countries.

Neuberger earlier this year announced a significant minority investment in Ryan, a tax consulting and software firm.

“I am confident that MIO and our clients will benefit from Neuberger’s world-class, well-resourced investment platform and private wealth capabilities,” said Basil Williams, CEO of MIO.