Consulting giant McKinsey & Company has agreed to transfer control of its approximately $20 billion investment business to asset manager Neuberger Berman. For decades, this operation has managed the wealth of McKinsey's current and former partners through complex hedge fund and alternative investment strategies.
This transaction marks a significant expansion for Neuberger Berman and opens a new chapter for McKinsey, a consulting firm renowned for serving blue-chip corporations and governments. McKinsey has spent roughly the past year evaluating various options for its fund management business, MIO Partners. Reports indicate that McKinsey hired advisors in January 2025 to initiate a strategic review of MIO and consider a potential sale.
Under the agreement, MIO's financial advisory business and approximately 280 employees are expected to be integrated into Neuberger Berman, operating as a division within the firm. The deal, which is still subject to regulatory approval and anticipated to close in 2026, did not have its financial terms disclosed by the two companies.
Pooneh Baghai, a McKinsey senior partner and board member, stated that given MIO's significant growth and product expansion, McKinsey determined it was no longer appropriate to own an investment and advisory firm of such scale, particularly one that operates far from the company's core expertise and strategic focus.
The transaction does not include MIO's passive index fund business.
MIO manages total assets of $26 billion. The $20 billion in assets being acquired by Neuberger Berman is primarily allocated to alternative investment strategies, notably a flagship special situations strategy designed to outperform benchmark indices through selective investments in equities, bonds, and other assets. MIO's assets also include approximately $6 billion in passive index fund investments, which are not part of this deal.
According to its website, MIO employs macro trading strategies across asset classes such as sovereign debt, commodities, foreign exchange, equity indices, and credit indices. Regulatory filings show significant investments in externally managed funds.
Neuberger Berman currently has assets under management of $563 billion. The firm's CEO, George Walker, suggested that MIO's core strategies might eventually be offered to new clients. Walker noted that one area for MIO's growth could be a further increase in allocations to private assets.
The business has operated independently for decades.
MIO's history dates back to the mid-1980s, and it became an independent manager for wealthy McKinsey executives in 2000. Although MIO has its own board and management, it has always operated as a subsidiary of McKinsey. Its assets include the retirement funds of McKinsey partners and the wealth of a broad network of alumni and their families.
Bob Sternfels, McKinsey's Global Managing Partner, expressed confidence that Neuberger Berman's track record in investment and wealth management, along with its partner culture, made it the right long-term steward for MIO. Walker highlighted a strong cultural fit between the two firms, noting both are private, employee-owned companies focused on serving clients' long-term interests.
In the transaction, Ardea Partners acted as financial advisor to McKinsey, with Simpson Thacher & Bartlett providing legal counsel. Skadden, Arps, Slate, Meagher & Flom LLP served as legal advisor to Neuberger Berman.
The MIO business had previously faced scrutiny over potential conflicts of interest.
It was reported that the MIO operation had been under review for years due to potential conflicts with McKinsey's consulting work.
In 2021, McKinsey agreed to pay $18 million to settle charges with the U.S. Securities and Exchange Commission (SEC) alleging the firm failed to maintain and enforce adequate procedures to prevent the misuse of material nonpublic information. The SEC alleged that partners involved in MIO's investment decisions had access to confidential information about clients' financial performance, transactions, and financing plans.
A McKinsey spokesperson stated that strict information barriers exist between McKinsey and MIO, and that MIO had further strengthened its policies and procedures. Importantly, the SEC's order did not find that MIO or McKinsey had actually misused any confidential or material nonpublic information.
MIO subsequently reformed its governance structure and stated its operations are "intentionally separate" from the consulting division. MIO no longer invests in individual stocks or bonds of any public or private companies.