Alt Investments
Global Hedge Fund Business Bulks Up Multi-Manager Capacity With Acquisition
Man Group,
the world’s largest listed hedge fund business with significant
operations in the US, said today it has
agreed to acquire FRM Holdings, a UK business in the
multi-manager sector
with around $8 billion of assets.
As part of the acquisition, Man Group will integrate FRM with
its
multi-manager business. As a result, the combined multi-manager
business
will have assets of around $19 billion, making it the biggest
independent non-US based fund of hedge funds.
No consideration will be paid up front, with contingent
consideration
dependent on asset retention. The deal will involve a scheme
of
arrangement under Jersey law and is also subject to the
satisfaction or
waiver of customary conditions (including receipt of
regulatory
approvals including from the Financial Services Authority).
The acquisition is expected to be completed before the end of the third quarter of this year, Man Group said in a statement.
Scale
“The scale of its combined investment resources plus the
sophistication and accelerated growth of Man’s managed accounts
platform
will benefit investors in the flagship funds of both entities.
With
additional scale and resources, the combination has the potential
to
attract assets and deliver strong returns to investors,” Man
Group said.
The contingent consideration to be paid over three years
comprises a
maximum of $82.8 million in cash, net of total net assets
acquired
(subject to post-closing balance sheet adjustments) and dependent
on
asset retention, and a 47.5 per cent share of performance
fees
attributable to FRM’s existing funds under management over three
years,
subject to a cap.
The combined business will trade under the FRM brand and will be
led
by Luke Ellis, chief executive of Man Multi-Manager and
previously
managing director of FRM.
Blaine Tomlinson, founder of FRM, will become non-executive
chairman
of the combined business. Sumitomo Mitsui Trust Bank, which
advises a
significant portion of FRM’s investors, has endorsed the
acquisition by
agreeing a new ten-year strategic relationship agreement with
Man.
