FRM integration will see Man bolt-on MM business
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He said the asset management house will acquire the entire share capital of FRM, a global hedge fund research and investment specialist, to bolster the multi-manager arm.
The integration means their combined multi-manager businesses will have total funds under management of $19bn (£12bn), making it one of the largest independent non-US based fund of hedge funds.
He said the acquisition would benefit investors in the flagship funds of both entities, attract assets and deliver strong returns to investors.
Mr Clarke said: “This transaction gives us the opportunity to improve significantly the profitability of our multi-manager business.
“By combining the complementary investor bases of the two businesses and pairing FRM’s well-regarded investment process with Man’s managed accounts infrastructure, we can increase revenues with no material change to Man’s current cost base.”
The acquisition is expected to be completed before the end of the third-quarter 2012. The contingent consideration to be paid over three years will be a maximum of $82.8m (£52.6m) in cash and a 47.5 per cent share of performance fees attributable to FRM’s existing funds under management over three years, subject to a cap.
Upon completion, the combined business will trade under the FRM brand. Luke Ellis, previously managing director of FRM, will become chief executive of Man’s multi-manager team.
Mr Clarke added: “We see this acquisition as a big step forward for both businesses. Our shared DNA, particularly across the investment process, will help us integrate rapidly and remain focused on delivering strong returns for our investors.
“The combined business will have the scale, resources and expertise to succeed in this competitive environment.”