Ameriprise 2010 Annual Report Download - page 25

Our Segments—Asset Management
Our Asset Management segment provides investment advice and investment products to retail and institutional clients.
Columbia Management primarily provides U.S. domestic products and services, and Threadneedle primarily provides
international investment products and services. U.S. domestic retail products are primarily distributed through unaffiliated
third party financial institutions and also through our Advice & Wealth Management segment, and institutional products and
services are sold through our institutional sales force. International retail products are primarily distributed through third
parties. Retail products include mutual funds, variable product funds underlying insurance and annuity separate accounts,
separately managed accounts and collective funds. Institutional asset management services are designed to meet specific
client objectives and may involve a range of products, including those that focus on traditional asset classes, separate
accounts, individually managed accounts, collateralized loan obligations, hedge funds and property funds. In addition to the
products and services provided to third party clients, management teams serving our Asset Management segment provide
all intercompany asset management services for Ameriprise Financial. The fees for all such services are reflected within the
Asset Management segment results through intersegment transfer pricing. Intersegment expenses for this segment include
distribution expenses for services provided by our Advice & Wealth Management, Annuities and Protection segments. All
intersegment activity is eliminated in our consolidated results. In 2010, 23% of our total revenues from external clients
were attributable to our Asset Management business.
We have continued to invest in the growth of our Asset Management segment, as we believe such investment affords
attractive opportunities for growth and the achievement of our performance objectives. On April 30, 2010, we completed
the acquisition of the long-term asset management business of the Columbia Management Group from Bank of America.
The acquisition significantly enhanced the capabilities of the Asset Management segment by increasing its scale,
broadening its retail and institutional distribution capabilities and strengthening and diversifying its lineup of retail and
institutional products. The integration of the Columbia Management business, which is ongoing and is expected to be
completed in 2011, has involved organizational changes to our portfolio management and analytical teams and to our
operational, compliance, sales and marketing support staffs. This integration has also involved the streamlining of our U.S.
domestic product offerings, a process that is ongoing. As a result of the integration, we combined RiverSource
Investments, our legacy U.S. asset management business, with Columbia Management, under the Columbia Management
brand. Threadneedle will remain the company’s primary international asset management platform.
Prior to the Columbia Management acquisition, in November 2008, we acquired the Seligman companies. The business of
the Seligman companies, which we integrated into our Asset Management segment, involved the management of open-
and closed-end investment funds, hedge funds and institutional portfolios. The Seligman business has been recognized for
its accomplished technology investment team, which manages retail mutual funds, separate accounts and hedge funds,
including Seligman Communications and Information Fund, and for its value-oriented offerings. We believe the Columbia
Management and Seligman acquisitions will help us achieve our goal of delivering consistent and strong investment
performance by enhancing our investment management leadership, talent, technology infrastructure and distribution
capabilities.
Revenues in the Asset Management segment are primarily earned as fees based on managed asset balances, which are
impacted by both market movements and net asset flows. We may also earn performance fees from certain accounts
where investment performance meets or exceeds certain pre-identified targets. At December 31, 2010, our Asset
Management segment had $457 billion in managed assets worldwide. Managed assets include managed external client
assets and managed owned assets. Managed external client assets include client assets for which we provide investment
management services, such as the assets of the Columbia Management and Threadneedle families of mutual funds and
the assets of institutional clients. Managed external client assets include assets managed by sub-advisors we select. These
external client assets are not reported on our Consolidated Balance Sheets. Managed owned assets include certain assets
on our Consolidated Balance Sheets (such as the assets of the general account and the variable product funds held in the
separate accounts of our life insurance subsidiaries) for which the Asset Management segment provides management
services and recognizes management fees. For additional details regarding our owned, managed and administered assets,
see ‘‘Management’s Discussion and Analysis of Financial Condition and Results of Operations’’ included in Part II, Item 7
of this Annual Report on Form 10-K.
U.S. Investment Management Capabilities
Our U.S. investment management activities are conducted primarily through investment management teams located in
offices throughout the United States. Each investment management team may focus on particular investment strategies,
asset types, products and on services offered and distribution channels utilized. These teams manage the majority of
assets in our Columbia family of mutual funds, as well as the assets we manage for institutional clients in separately
managed accounts, hedge funds, the general and separate accounts of the RiverSource Life companies, the assets of IDS
Property Casualty and Ameriprise Certificate Company and the investment portfolio of Ameriprise Bank. These investment
management teams also manage assets under sub-advisory arrangements.
9