Family Office
Angelo Gordon takes control of ForstmannLeff
Growth manager takes another stab at getting out of Refco’s
shadow. Alternatives manager Angelo Gordon has bought a majority
stake in asset manager ForstmannLeff. The deal comes about six
months after ForstmannLeff’s management had bought the firm back
from Refco, a scandal-ridden derivatives trading firm.
Details of the transaction weren’t disclosed.
Understanding
Though New York and Boston-based Forstmann gets a new CEO in Dana
Troxell, Angelo Gordon’s erstwhile head of corporate development,
the plan is for Forstmann to keep its name and continue running
growth and core domestic equity portfolios for institutional
investors and very wealthy private clients – and to do so
independently of its new parent.
“[Angelo Gordon] has built a sterling reputation based on
rigorous fundamental research and consistent investment returns
for their clients,” says Beth Dater, Forstmann’s senior managing
director. “They understand the need for investment autonomy and
risk control.”
Meanwhile Troxell says he’s looking forward “to working with the
team at Forstmann to continue their focus on disciplined,
research-driven portfolio management.”
Angelo Gordon’s CEO John Angelo says Forstmann is a good fit with
his firm since both have a “disciplined investment process and
rigorous risk controls.” And, he adds, the combination of a
traditional manager with an alternative player “meet the needs of
the most sophisticated institutional investors.”
Old suitor
Back in October 2005, Old Mutual Asset Management, the U.S. asset
management group of London-based Old Mutual plc, said it had
agreed to acquire a controlling chunk of Forstmann. Days later,
however, the Refco scandal hit the headlines, and Old Mutual
quietly dropped its plan to buy Forstmann.
Refco got into trouble last October when its CEO Phillip Bennett
disclosed that he’d hidden about $30 million in debt on the
company’s books. Within a week the company had filed for
protection from its creditors. Man Financial, another U.K.
company, subsequently acquired the Refco brand name along with
the bulk of its assets.
Forstmann was founded in 1968. It had about $2.7 billion in
assets under management at the end of 2005. –FWR
.