Man Group plc (Man), through its US subsidiaries, is to take full ownership of Ore Hill Partners LLC and Ore Hill Partners Capital Management LLC (together, Ore Hill) for a predominantly share-based consideration. The transaction is subject to obtaining applicable consents, but completion is scheduled for the second quarter. The acquisition is expected to be earnings enhancing in the first full year.
Man’s strategic relationship with Ore Hill dates from 2008, when Man acquired, through its US subsidiaries, a stake of approximately 50% in Ore Hill, a credit-focused, event-driven hedge fund and structured product manager based in New York. The remaining interest has been owned by Ore Hill’s principals and employees. Man’s acquisition of the remaining 50% of Ore Hill is in line with its strategic focus on internal investment management capabilities, and continues the build out of single strategies on the GLG platform.
Upon completion of the transaction, while Ore Hill will remain as an investment adviser, the operations will be integrated into and managed as part of GLG, Man’s discretionary investment management platform. Ben Nickoll and Fritz Wahl, Ore Hill’s Co-Founders, as well as Alok Makhija, will continue to manage the Ore Hill portfolios. As part of the transaction, the three principals have agreed to employment arrangements that include provisions for sharing in management and performance fees earned by the funds they manage. The Man shares received by Nickoll and Wahl will be subject to share lock-up agreements.
Ore Hill manages a series of hedge funds with funds under management of approximately USD800 million, of which previously Man has consolidated 50%. Upon completion, these funds will be fully consolidated into Man’s funds under management. In addition, Ore Hill manages a USD1.1 billion structured product.
Raffaele Costa (pictured), Head of Sales for North America and Europe, said: “We are extremely excited to add Ore Hill to the GLG platform. This solidifies our position as a leading credit manager, in addition to our already strong equity strategies. Ore Hill is a well established manager, with a strong track record over nine years, and they will spearhead our expansion into US Credit.”
Ben Nickoll, Ore Hill’s Chief Investment Officer, said: “We believe that this is the natural progression of our relationship with the Man organisation. Since they acquired the GLG business last year, the parties all agreed that Ore Hill’s products would be well positioned on the GLG platform. It will allow us greater operating efficiencies and a broader reach. Teaming with the talented investment professionals at GLG will be a great benefit.”