| SECURITIES AND EXCHANGE COMMISSION | |||
| Washington, D.C. 20549 | |||
| _______________________ | |||
| FORM 8-K | |||
| CURRENT REPORT | |||
| Pursuant to Section 13 or 15(d) of the | |||
| Securities Exchange Act of 1934 | |||
| Date of Report: April 18, 2011 | |||
| (Date of earliest event reported) | |||
| PRINCIPAL FINANCIAL GROUP, INC. | |||
| (Exact name of registrant as specified in its charter) | |||
| Delaware | 1-16725 42-1520346 | ||
| (State or other jurisdiction | (Commission file number) (I.R.S. Employer | ||
| of incorporation) | Identification Number) | ||
| 711 High Street, Des Moines, Iowa 50392 | |||
| (Address of principal executive offices) | |||
| (515) 247-5111 | |||
| (Registrant’s telephone number, including area code) | |||
| Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the | |||
| registrant under any of the following provisions: | |||
| [ ] | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | ||
| [ ] | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | ||
| [ ] | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR | ||
| 240.14d-2(b)) | |||
| [ ] | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR | ||
| 240.13e-4(c)) | |||
| _______________________ | |||
| Page 2 | |||
| Item 7.01 | Regulation FD Disclosure | ||
| Principal Financial Group, Inc. announced that its wholly-owned subsidiary, Principal Global Investors, | |||
| LLC, a global asset manger, entered into a definitive agreement to acquire a 51% majority stake in Finisterre | |||
| Capital, LLP, and Finisterre Holdings Limited, (together Finisterre Capital), an emerging markets investor | |||
| based in London. The initial payment for the majority stake will be $84.6 million USD, with a possible | |||
| additional contingent payment of up to $30 million in 2013, dependent upon performance targets. A press | |||
| release of the announcement is included herewith as Exhibit 99. | |||
| Item 9.01 | Financial Statements and Exhibits | ||
| 99 | Finisterre Capital Press Release | ||
| SIGNATURE | |||
| Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused | |||
| this report to be signed on its behalf by the undersigned thereunto duly authorized. | |||
| PRINCIPAL FINANCIAL GROUP, INC. | |||
| By: /s/ John Egan | |||
| Name: John Egan | |||
| Title: Vice President – Investor Relations | |||
| Date: April 18, 2011 | |||
| Page 3 | |
| Exhibit 99 | |
| Release: | On receipt, April 18, 2011 |
| Media Contacts: | |
| US media contact: Paula Chizek, 515-235-6010, chizek.paula@principal.com | |
| UK media contact - PGI: Claire Maloney, (44) 20 7307 5330, claire.maloney@capitalmsl.com | |
| UK media contact - Finisterre: Paul Mungo (44) 20 3178 6872, paul.mungo@peregrinecommunications.co.uk | |
| Investor Relations: | |
| John Egan, Principal Financial Group, 515-235-9500, egan.john@principal.com | |
| Principal Global Investors To Acquire Majority Stake in Finisterre Capital | |
| Acquisition expands its emerging market investment capabilities | |
| (Des Moines, Iowa) – Principal Global Investors, LLC, a leading global asset manager and a member | |
| of the Principal Financial Group® (NYSE:PFG), today announced a definitive agreement to acquire a | |
| majority stake in Finisterre Capital, LLP, and Finisterre Holdings Limited, (together Finisterre | |
| Capital), an established emerging markets investor based in London. | |
| “Finisterre Capital is a top-class emerging markets fixed income specialist with a strong | |
| investment performance track record,” said Jim McCaughan, chief executive officer of Principal | |
| Global Investors. “We are excited about the opportunity to help the business develop further and | |
| expand our capabilities in this growing market segment. There is already an enormous appetite to | |
| invest in emerging economies and we firmly believe the demand will continue as these markets | |
| develop.” | |
| Founded in 2002, Finisterre Capital has approximately $1.63 billion1 in assets under | |
| management primarily across three funds: Global Opportunity Fund, Sovereign Debt Fund and Credit | |
| Fund. The five partners (Frode Foss-Skiftesvik, Paul Crean, Rafaël Biosse Duplan, Xavier Corin-Mick | |
| and Yan Swiderski) will retain a significant minority stake in the business and have agreed to put a | |
| significant share of their consideration into funds managed by the firm. They will continue to direct the | |
| day-to-day operations and will retain authority over fund investment decisions. | |
| “The strategic partnership with Principal offers us the very attractive combination of continued | |
| autonomy and long-term stability for our clients,” said Paul Crean, chief investment officer at | |
| Finisterre Capital. “It will enable us to expand our capabilities while preserving our business focus, | |
| organizational structure and unique investment culture.” | |
| Through this transaction, The Principal will enhance its emerging market investment | |
| capabilities, with an opportunity to develop a wider platform through the launch of complementary | |
| ______________________ | |
| 1 As of April 1, 2011. | |
| Page 4 |
| new emerging market products and strategies, and further strengthen its well-established multi- |
| boutique model. Finisterre Capital will benefit from access to The Principal’s global presence and |
| strong distribution network, as well as leveraging Principal’s product development expertise and best- |
| practice support infrastructure. |
| The transaction is expected to close early in third quarter, pending regulatory approval. It is |
| part of the Principal Financial Group’s 2011 capital deployment strategy of spending approximately |
| $700 million on executing attractive M&A opportunities and a share repurchase program. Excluding |
| transaction and integration costs, The Principal estimates the acquisition will be EPS neutral in 2011 |
| and accretive in 2012. |
| Sandler O'Neill + Partners advised The Principal on the transaction and Fenchurch Advisory |
| Partners advised Finisterre Capital. |
| For more news and insights from The Principal, connect with us on Twitter at: |
| http://twitter.com/ThePrincipal. |
| Forward looking and cautionary statements |
| This press release contains forward-looking statements, including, without limitation, statements as to |
| operating earnings, net income available to common stockholders, net cash flows, realized and |
| unrealized losses, capital and liquidity positions, sales and earnings trends, and management's beliefs, |
| expectations, goals and opinions. The company does not undertake to update or revise these |
| statements, which are based on a number of assumptions concerning future conditions that may |
| ultimately prove to be inaccurate. Future events and their effects on the company may not be those |
| anticipated, and actual results may differ materially from the results anticipated in these forward- |
| looking statements. The risks, uncertainties and factors that could cause or contribute to such material |
| differences are discussed in the company's annual report on Form 10-K for the year ended Dec. 31, |
| 2010, filed by the company with the Securities and Exchange Commission, as updated or |
| supplemented from time to time in subsequent filings. These risks and uncertainties include, without |
| limitation: adverse capital and credit market conditions that may significantly affect the company’s |
| ability to meet liquidity needs, access to capital and cost of capital; continued difficult conditions in the |
| global capital markets and the economy generally that may materially adversely affect the company’s |
| business and results of operations; the risk from acquiring new businesses, which could result in the |
| impairment of goodwill and/or intangible assets recognized at the time of acquisition; impairment of |
| other financial institutions that could adversely affect the company; investment risks which may |
| diminish the value of the company’s invested assets and the investment returns credited to customers, |
| which could reduce sales, revenues, assets under management and net income; requirements to post |
| collateral or make payments related to declines in market value of specified assets may adversely affect |
| company liquidity and expose the company to counterparty credit risk; changes in laws, regulations or |
| accounting standards that may reduce company profitability; fluctuations in foreign currency exchange |
| rates that could reduce company profitability; Principal Financial Group, Inc.’s primary reliance, as a |
| holding company, on dividends from its subsidiaries to meet debt payment obligations and regulatory |
| restrictions on the ability of subsidiaries to pay such dividends; competitive factors; volatility of |
| financial markets; decrease in ratings; interest rate changes; inability to attract and retain sales |
| representatives; international business risks; a pandemic, terrorist attack or other catastrophic event; |
| and default of the company’s re-insurers. |
| Page 5 |
| About Principal Global Investors |
| Principal Global Investors is a diversified asset management organization and a member of the |
| Principal Financial Group, with expertise in equities, fixed income and real estate investments, as well |
| as specialized overlay and advisory services. Principal Global Investors manages $232.4 billion in |
| assets2 primarily for retirement plans and other institutional clients. |
| About Finisterre Capital LLP |
| Finisterre Capital LLP, founded in 2002, is an emerging markets fixed income specialist dedicated to |
| delivering risk-controlled, total return investment strategies to the institutional marketplace. The firm |
| manages emerging markets funds in a variety of asset classes, including sovereign debt, local currency |
| debt, foreign exchange, corporate credit, special situations and equity. |
| About the Principal Financial Group |
| The Principal Financial GroupÒ (The Principal ® )3 is a leader in offering businesses, individuals and |
| institutional clients a wide range of financial products and services, including retirement and |
| investment services, life and health insurance, and banking through its diverse family of financial |
| services companies. A member of the Fortune 500, the Principal Financial Group has $318.8 billion in |
| assets under management2 and serves some 19.1 million customers worldwide from offices in Asia, |
| Australia, Europe, Latin America and the United States. Principal Financial Group, Inc. is traded on |
| the New York Stock Exchange under the ticker symbol PFG. For more information, visit |
| www.principal.com. |
| # # # |
| ______________________ |
| 2 As of Dec. 31, 2010. |
| 3 "The Principal Financial Group" and “The Principal” are registered service marks of Principal Financial Services, Inc., a member of the |
| Principal Financial Group. |