Gottex Fund Management  has reached agreement on the acquisition of a majority interest in Frontier Investment Management, a multi-asset investment management firm in the UK.
Michael Azlen, founder and CEO/CIO of Frontier, will retain a substantial equity interest in Frontier, as well as continuing to lead the Frontier business, and join Gottex as a senior executive in its multi-asset business.
Gottex has agreed to acquire the majority share capital of Frontier, a profitable multi-asset investment manager with USD 5501m of assets under management across a range of liquid low cost multi-asset products. The consideration involves a combination of Gottex shares (up to 0.45 million at current share price) and additional cash, payable over a period of two years and adjusted for Frontier’s future revenues. Gottex expects the acquisition to be accretive on an operational profit as well as on a fully diluted earnings per share basis within one year, partly due to expected synergies. Completion of the acquisition is subject to certain conditions, including regulatory approval.
Gottex believes the acquisition provides compelling strategic benefits, including establishing one of the leading alternatives oriented multi-asset investment teams as well as complementing Gottex’s traditional fund of hedge funds business with a direct investment multi-asset capability. The combination of Frontier with Gottex’s multi-asset business will create a complete range of multi-asset investment capabilities from liquid low cost multi-asset index replication portfolios to actively managed multi-asset funds. In addition, Frontier’s liquid and UK regulated investment products combined with Gottex’s existing active approach to macro markets will allow the combined firm to offer products globally. Gottex also believes it will be able to benefit from access to Frontier’s retail distribution in the UK through its well-established IFA channels.
Azlen will take on the responsibility for expanding Gottex’s European multi-asset business, starting from Frontier’s strong UK base. Frontier will continue to offer its current product range, which will be augmented globally by a range of actively managed multi-asset products. Azlen will report to Bill Landes, global CIO of Gottex multi-asset business.
Landes says: “At Gottex, we firmly believe that alternatives oriented multi-asset investing is an area of enormous strategic potential for the asset management industry in both the short and long term. The combination of Gottex and Frontier establishes one of the leading alternatives oriented multi-asset investment teams, which will allow us to offer our clients an enhanced range of investment solutions in this fast growing area.”
Azlen says: “I am excited to join forces with Gottex and to work with its strong team of highly regarded professionals. Gottex provides a global institutional asset management platform with strong investment processes that will allow Frontier’s product line to grow and achieve its potential.”
Joachim Gottschalk (pictured), chairman and CEO of Gottex, says: “We are very pleased to welcome Frontier’s team and clients to Gottex. Our increased presence in the multi-asset investment space combined with our global footprint and infrastructure will provide a strong platform for growth in this exciting investment space.”