Affiliated Managers Group, Inc. (NYSE: AMG), a global asset management company, announced that it has reached a definitive agreement with Petershill Fund I, a group of investment vehicles managed by Goldman Sachs Asset Management, L.P., to acquire 100% of Petershill Fund I’s minority equity interests in five leading alternative investment firms: Winton Capital Group Ltd., Capula Investment Management LLP, Partner Fund Management, L.P., Mount Lucas Management LP, and CapeView Capital LLP.
Under the terms of the agreement, AMG will acquire the interests in the firms from Petershill Fund I for approximately $800 million in total consideration, which will be paid in cash at closing, funded up to 50% in equity. Upon the closing of the transaction, senior management at each of the firms will continue to hold an unchanged majority of the equity in each respective business and retain operating autonomy in the business under the same terms as the prior arrangements with Petershill Fund I. In addition, upon closing, AMG’s assets under management are expected to increase by $55 billion to nearly $700 billion (pro forma as of March 31, 2016), and AMG expects that the transaction will increase Economic earnings per share by $0.50 to $0.80 in 2017. These firms are recognized as among the industry’s best managers across an array of alternative investment strategies, including systematic trading and managed futures; fixed income relative value; equity long/short; and global macro, and serve a wide range of institutional, retail, and high net worth investors around the world:
- Winton Capital Group Ltd. is a global investment manager that utilizes scientific methods to develop investment systems across a broad range of products from diversified multi-asset offerings to regional long-only equities, with approximately $34.5 billion in assets under advisement for a diverse set of investors including some of the world’s largest institutions. Founded in 1997, the firm is headquartered in London and has over 400 employees, with additional offices in Oxford, Zurich, Hong Kong, Shanghai, New York, Tokyo, Sydney, and San Francisco
- Capula Investment Management LLP is a global fixed income specialist firm located in London with affiliated entities in Greenwich, CT, Hong Kong, and Tokyo. With approximately $12.7 billion under management, the firm manages absolute return, enhanced fixed income and tail risk strategies. Established in 2005, the firm focuses on developing innovative investment strategies that exhibit low correlation to traditional equity and fixed income markets
- Partner Fund Management, L.P. (“PFM”) manages approximately $4.3 billion, primarily in global equities, across global diversified long/short, global long, and global healthcare strategies. Founded in 2004, PFM seeks to generate long-term capital appreciation through a fundamental research process integrated with a macro framework. The firm is headquartered in San Francisco, CA and has 69 employees
- Mount Lucas Management LP manages approximately $1.7 billion across global macro, a diversified futures index strategy, a commodity futures index strategy, and large cap equity. The firm was founded in 1986 with the launch of an innovative, actively managed diversified futures program, and is headquartered in Newtown, PA with over 20 employees
- CapeView Capital LLP is a London-based alternative manager operating a European credit and distressed fund as well as a European equity long/short fund. Founded in 2001, the firm currently has 23 staff and manages approximately $1.7 billion
“We are delighted to be investing in these excellent firms, and have tremendous regard for the businesses built by their outstanding management teams,” said Sean M. Healey, Chairman and Chief Executive Officer of AMG. “Consistent with AMG’s partnership philosophy, the management team of each firm will continue to have operating autonomy and substantial retained equity in their own businesses.”
“With our global scale and capabilities, and 23-year track record of successful investments, AMG is the preeminent partner to leading boutique firms around the world, and has an expanding forward opportunity set to invest in the world’s most successful independent investment managers,” Mr. Healey continued. “We are confident in our ability to continue to generate earnings growth both from the organic growth of our existing business and through making accretive investments in additional outstanding firms around the world.”
Closing of the transaction is subject to customary closing conditions, and AMG’s investment in interests representing approximately half of the total transaction value is expected to close during the third quarter of 2016, with the balance of the investment expected to close by year-end 2016.