Man Group, world’s largest publicly traded hedge fund, agreed to buy FRM Holdings
Man will not pay anything up front for the FRM Holdings Group, which is based in London. Instead, there will be staggered payments that depend on FRM’s ability to retain assets as the firms merge over the next three years. Ultimately, the acquisition could cost about $83 million.
“This financially compelling transaction provides us with the opportunity to significantly improve the profitability of our multi-manager business,” said Peter Clarke, Man’s chief executive. “By combining the complementary investor bases of the two businesses and pairing FRM’s well-regarded investment process with Man’s managed accounts infrastructure, we can increase revenues with no material change to Man’s current cost base.”
Currently Man’s so-called fund of funds invests across a portfolio of hedge funds, manages about $11 billion. FRM, meanwhile, manages close to $8 billion. Business will be run by Luke Ellis (Man’s multi-manager business, and is a former executive of FRM).
The acquisition is Man’s latest attempt to bolster assets in its fund of funds business, which have dwindled as many investors have pulled their money from the firm in recent months. Stung by an investment in the Madoff Ponzi scheme as well as weak performance, the company has struggled to keep pace in its industry.
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