Ameriprise 2012 Annual Report Download - page 28

Ameriprise Financial subsidiaries is reviewed by the boards of directors and staff functions of the applicable subsidiaries
consistent with regulatory investment requirements. At December 31, 2012, the Asset Management segment managed
$36.1 billion of institutional owned assets.
Management of Collateralized Debt Obligations (‘‘CDOs’’)
We provide collateral management services to special purpose vehicles that issue CDOs through a dedicated team of
investment professionals. CDOs are securities collateralized by a pool of assets, primarily syndicated bank loans and, to a
lesser extent, high-yield bonds. CDO offerings typically involve multiple tranches of securities, providing investors various
maturity and credit risk characteristics. Scheduled payments to investors are based on the performance of the CDO’s
collateral pool. For collateral management of CDOs, we earn fees based on the par value of assets and, in certain
instances, we may also receive performance-based fees. At December 31, 2012, excluding CDOs managed by
Threadneedle, we managed $5.1 billion of assets related to CDOs.
Private Funds
We provide investment advice and related services to private, pooled investment vehicles organized as limited partnerships,
limited liability companies or foreign (non-U.S.) entities. These funds are currently exempt from registration under the
Investment Company Act under either Section 3(c)(1) or Section 3(c)(7) or related interpretative relief and are organized
as domestic and foreign funds. For investment management services, we generally receive fees based on the market value
of assets under management, and we may also receive performance-based fees. As of December 31, 2012, we managed
$612 million in private fund assets.
Ameriprise Trust Collective Funds and Separately Managed Accounts
Collective funds are investment funds that are exempt from registration with the Securities and Exchange Commission
(‘‘SEC’’) and offered primarily through banks and other financial institutions to institutional clients such as retirement,
pension and profit-sharing plans. We currently serve as investment manager to a series of ATC collective funds covering a
broad spectrum of investment strategies. We receive fees for investment management services that are generally based
upon a percentage of assets under management. In addition to Columbia Management funds and RiverSource Trust
Collective Funds, ATC offers separately managed accounts and collective funds to our retirement plan clients.
As of December 31, 2012, we managed $6.6 billion of ATC Funds and separate accounts for ATC clients. This amount
does not include the Columbia Management family of mutual funds held in other retirement plans because these assets
are included under assets managed for institutional and retail clients and within the ‘‘Columbia Management — Mutual
Funds’’ section above.
Sub-advised Accounts
CMIA acts as sub-adviser for certain domestic and international mutual funds, private banking individually managed
accounts and common trust funds advised by other firms. CMIA continues to pursue opportunities to sub-advise additional
investment company assets in the U.S. and overseas. As with the Columbia Management funds, we earn management
fees for these services based on the underlying asset value of the funds we sub-advise. As of December 31, 2012, we
managed over $33.8 billion in assets in a sub-advisory capacity.
Retail Distribution
Columbia Management Investment Distributors, Inc. acts as the principal underwriter and distributor of our Columbia
Management family of mutual funds. Pursuant to distribution agreements with the funds, we offer and sell fund shares on
a continuous basis and pay certain costs associated with the marketing and selling of shares. We earn commissions for
distributing the Columbia Management funds through sales charges (front-end or back-end loads) on certain classes of
shares and distribution and servicing-related (12b-1) fees based on a percentage of fund assets, and receive intersegment
allocation payments. This revenue is impacted by overall asset levels and mix of the funds.
Columbia Management fund shares are sold through both our Advice & Wealth Management segment and through
unaffiliated third-party financial intermediaries. Among our third-party distribution arrangements is a strategic distribution
agreement entered into in connection with Ameriprise’s acquisition of Columbia Management in 2010 that provides
ongoing access to clients of Bank of America affiliated distributors, including U.S. Trust. Fees and reimbursements paid to
such intermediaries may vary based on sales, redemptions, asset values, asset allocation, product mix, and marketing and
support activities provided by the intermediary. Intersegment distribution expenses for services provided by our Advice &
Wealth Management Segment are eliminated in our consolidated results.
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