Newport Beach-based Pacific Life Insurance Co.’s latest buy plays into its longstanding strategy on acquisitions.
Last week’s purchase of JPMorgan Chase & Co.’s U.S. Pension Advisory Group will give Pacific Life an opportunity to grow a relatively young business line into a major business line, a recipe that has worked well in the past.
JPMorgan established the unit in 2005 to work with corporations, defined benefit pension plans, nuclear decommissioning trusts and other institutional investors.
Pacific Life was attracted to the company’s growth prospects in the fragmented pension management market, according to spokesman Tennyson Oyler.
Growth Strategy
The business, renamed Pacific Global Advisors, plays into Pacific Life’s strategy of acquiring new operations, growing them slowly, and learning the intricacies of their markets before expanding.
It’s a growth plan Chief Executive James Morris first employed in 2008 when Pacific Life bought a unit of Bermuda’s Scottish Re Group Ltd. for $71.2 million.
It took the company three years to build up that unit—renamed Pacific Life Re—before it made a significant expansion with last month’s buy of the life retrocession—or reinsurance—business of Toronto-based Manulife Financial Corp., Canada’s largest insurance company.
Pacific Global Advisors will remain headquartered in New York City.
The business employs about 25 people, according to Oyler.
Terms of the deal and other specifics were not disclosed.
JPMorgan Chase veteran David Oaten will continue to lead Pacific Global Advisors in Newport Beach as managing director under Pacific Life’s ownership. Its management team will be retained, the company said.
Pacific Life and its sister companies offer life insurance policies, investments and jet leases.
The company generates more than $5 billion annually in revenue, mostly from life insurance premiums and annuities.
Private Crown
Earlier this year, Fountain Valley-based Kingston Technology Co., a maker of memory products for computers and consumer electronics, passed Pacific Life to become the largest privately held company in the county, according to Business Journal research published earlier this year, which reflected 2010’s results.
Kingston saw 2010 revenue of $6.5 billion, up 59% from a year earlier after a slump in prices for memory chips gave way to a surge that boosted sales at the company.
Pacific Life’s recent acquisitions have come as Kingston maintains a tempered outlook for this year, which has been marked by slowing demand and higher commodity costs.
That could lead to Pacific Life retaking the top spot for privately held companies this year.
Pacific Life has been offering life insurance since 1868, when it got its start in Sacramento. The insurer moved to Southern California in 1906 after the San Francisco earthquake demolished its headquarters.
In the 1970s, Pacific Life created Pacific Investment Management Co., which now manages more than $1 trillion in bond funds and other investments.
Pimco split off from Pacific Life in 1994.
