Federated Investors is to acquire Prime Rate Capital Management, LLP, a United Kingdom-based provider of institutional liquidity and fixed income products, from Matrix Group Limited. Prime Rate Capital Management’s family of UCITS products includes Prime Rate Sterling Liquidity Fund, Prime Rate Euro Liquidity Fund and Prime Rate US Dollar Liquidity Fund, among other products. Financial terms of the agreement have not been disclosed.
Prime Rate Capital Management’s AAA-rated liquidity funds, known as Qualifying Money Market Funds, serve the corporate and institutional market. The funds, totaling approximately GBP 1.5 billion (USD2.4 billion USD) in assets, are rated AAA by both Fitch Ratings and Standard & Poor’s.
"The agreement will incorporate Prime Rate Capital’s experienced team, insightful processes and excellence in liquidity management into Federated’s money market business – with euro, sterling and dollar-denominated UCITS products positioning us for future growth," says Gordon J Ceresino, president of Federated International Management Limited. "After adding an additional sales person in our Frankfurtoffice earlier this year, Federated continues to seek opportunities to expand our global business in Europeand around the world."
With USD189 billion in AAA-rated money market funds, Federated is the second-largest US manager of money funds of the highest credit quality. Federated has 12% of the US market share of AAA-rated money market funds, according to iMoneyNet.
"We opted to join Federated because of the company’s reputation as a premier global liquidity manager since the 1970s," says Dennis Gepp (pictured), managing director and chief investment officer of Prime Rate Capital. "Our clients and shareholders in the funds can be confident in Federated’s stewardship and credit process, as it is one of the world’s largest and most experienced managers of money market products."
David Royds, chairman and co-founder of Matrix Group says: "Since its launch in 2007 we have very successfully built Prime Rate into one of the UK’s fastest-growing and best-performing institutional cash management businesses, and this transaction represents an important milestone for Matrix and Prime Rate."
The transaction is subject to review and approval by regulators, including the UK Financial Services Authority, as well as satisfaction of other customary and agreed-upon conditions, and is expected to be completed during the first quarter of 2012. It is intended that Prime Rate Capital Management’s headquarters will remain in London, with the current investment management team operating as a subsidiary of Federated Holdings (UK) Limited, a group company of Federated Investors, Inc.
