Affiliated Managers Group (AMG) is to acquire Petershill Fund I’s minority equity interests in five alternative investment firms – Winton Capital Group, Capula Investment Management, Partner Fund Management, Mount Lucas Management, and CapeView Capital.
Under the terms of the agreement, AMG will acquire the interests in the firms from Petershill Fund I for approximately USD800 million in total consideration, which will be paid in cash at closing, funded up to 50 per cent 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 USD55 billion to nearly USD700 billion (pro forma as of 31 March, 2016), and AMG expects that the transaction will increase Economic earnings per share by USD0.50 to USD0.80 in 2017. These firms are recognised 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.
“We are delighted to be investing in these excellent firms, and have tremendous regard for the businesses built by their outstanding management teams,” says Sean M Healey (pictured), 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. 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.