Man Group, the British hedge fund manager, has acquired rival US-based fund management group Numeric for as much as $494m (£290.5m), as it looks to put its hefty cash pile to work.
Man disclosed last month that the two companies were in talks. The FTSE 250 hedge fund manager had previously flagged its desire to acquire a fund management businesses to help diversify its revenues, FTAdviser sister publication FastFT reports.
Numeric is a privately-owned, Boston-based quantitative equity manager with $14.7bn (£8.6bn) of funds under management as at the end of May.
Under the terms of the deal, Man will pay $219m in cash at close, with as much as $275m (£161.7m) to be paid to Numeric’s management team and employees in five years time, depending on the group’s profitability.
Said Man chief executive Manny Roman on Thursday (19 June): “We are delighted to announce the acquisition of Numeric, which has an excellent track record of performance and innovation in quantitative investing.
“The transaction provides us with the opportunity to advance two of our core strategic objectives: first, to build a diversified quantitative fund management business with significant assets in fundamentally based quantitative strategies and second, to develop further our presence in the US market.”
The FTSE 250 hedge fund manager is in the process of diversifying its business away from its $12.5bn (£7.4bn) managed futures fund AHL, which has suffered from large investor outflows in recent years.
Mr Roman, who took over as Man’s chief executive following its $1.6bn (£940m) merger with GLG Partners in 2010, has been cutting costs and launching new products to compensate for the loss of revenues from AHL’s flagship fund. The value of that fund remains well below the level where it could start charging investors performance fees.