Merian Global Investors (MGI) is to acquire the multi-asset business from Kestrel Investment Partners.
As part of the deal, which is expected to complete in December 2019 (subject to regulatory and shareholder approval), the entire Kestrel multi-asset team will join MGI, including head of desk and lead fund manager John Ricciardi. He will report to MGI’s CEO, Mark Gregory. John is joint CEO of Kestrel, a business he co-founded with the partners of Kestrel Partners LLP in 2011. He has over three decades of multi-asset investing experience, including six years as global head of asset allocation for Alliance Bernstein.
Management of the USD151 million Kestrel Global Portfolio will transfer to MGI as part of the transaction, as will the associated intellectual property. The fund will adopt the “Merian” naming convention immediately upon completion, with its new name announced in due course. The fund aims to achieve capital growth by directly investing in a diversified portfolio of asset classes across global markets, using a repeatable process of quantitative macro modelling, combined with fund manager expertise. The team has an outstanding long-term track record, with the Kestrel Global Portfolio (I USD) delivering a compound annual return of 6.2 per cent, compared to 2.4 per cent for the peer index since inception.
Joining MGI with Ricciardi are portfolio managers Ian Forrest and Dan Matthews. The three fund managers have been investing together for the past seven years, including developing a proprietary macro modelling system. The investment team will be accompanied by three system analysts who have played a key role in evolving the desk’s investment process.
The acquisition is MGI’s first deal since it completed a management buyout in June 2018 and reflects its attractiveness as a destination for top industry talent, due to its no-CIO policy, strong brand and extensive distribution network.
The deal is aligned with MGI’s strategy to grow and diversify its investment capabilities in asset classes where it can add meaningful value for its clients. Flexible multi-asset strategies are popular with investors seeking to diversify their portfolios. In addition to growing its existing fund, the new multi-asset team will be launching a long/short strategy in early 2020, subject to regulatory approval. This proposal reflects MGI’s ambition to expand its liquid alternative capabilities, an asset class that is growing in demand among both wholesale and institutional investors.
Mark Gregory (pictured), CEO, Merian Global Investors, says: “For some time we’ve been looking to selectively expand our investment proposition, aligned with client demand for differentiated, high-alpha active strategies that offer genuine portfolio diversification. The Kestrel multi-asset team’s proven process is hugely compelling and I’m delighted that we’ve signed an agreement to secure its best-in-class business.
“John and his colleagues are hugely experienced and have a fantastic track record. With the backing of our strong distribution presence and the launch of a new long/short strategy, we’re confident that we will be able to grow the team’s assets under management. I look forward to welcoming them to the business at the end of the year.”
Ricciardi adds: “Merian Global Investors is an ideal home for our ambitious team. It is an incredibly well-respected asset manager with a reputation for innovation and a positive, entrepreneurial culture. The support of MGI’s talented distribution and operational teams will allow us to develop and grow our strategy, while its commitment to having “no house style” will afford us the freedom to manage our products with the flexibility that’s resulted in long-term outperformance for our investors.”
Ari Zaphiriou Zarifi, chairman of Kestrel Partners, says: “Having launched Kestrel’s global asset allocation business in 2011 under the Kestrel Investment Partners brand name, John has consistently delivered outstanding returns. As well as a strong track record, John has also built an excellent team and now is the right time for them to move to a larger platform where they can capitalise on the success they have had at Kestrel. This is a great outcome for all parties and we wish John and his team all the best for a successful future with Merian Global Investors.”
