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Affiliated Managers to Buy Minority Stake in 5 Hedge Funds
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Affiliated Managers Group Inc. (AMG - Free Report) has announced a deal to acquire minority equity stakes in five alternative investment firms from Petershill Fund I. The company will be paying $800 million in cash for the stakes in U.K.-based Winton Capital Group Ltd., Capula Investment Management LLP and CapeView Capital LLP; and U.S.-based Partner Fund Management, L.P. and Mount Lucas Management LP. This news led to a 2.3% jump in Affiliated Managers’ share price.
Petershill Fund I is a group of investment vehicles managed by Goldman Sachs Asset Management, L.P., a division of The Goldman Sachs Group, Inc. (GS - Free Report) .
Deal Details
Affiliated Managers’ investment in the stakes representing 50% of deal value is expected to close by the third quarter of 2016 and the remaining by this year-end. Notably, the transaction is subject to customary closing conditions.
Following the closure of the deal, the senior management of each of these firms will continue to hold majority interest. Further, these firms will maintain “operating autonomy in the business under the same terms as the prior arrangements with Petershill Fund I.”
Moreover, upon closure, Affiliated Managers’ assets under management will increase $55 billion to roughly $700 billion (pro-forma as of Mar 31, 2016). Also, the company expects the deal to add economic earnings of 50-80 cents per share in 2017.
Affiliated Managers intends to fund up to 50% of the deal in equity. In a separate development, the company announced its plan to offer 2.5 million shares in public offerings, with underwriters being granted an option to purchase up to 375,000 additional shares.
Going Forward
Sean M. Healey, Chairman and Chief Executive Officer of Affiliated Managers said, “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 believe Affiliated Managers’ portfolio of investment products provides it a competitive edge when it comes to fulfilling the diverse needs of clients. Also, the company has an almost unbeaten track record of buying equity interests in asset management companies with strong performance-oriented products.
Healey further added “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.”
Currently, Affiliated Managers carries a Zacks Rank #3 (Hold). A couple of better-ranked finance stocks worth a look include SEI Investments Co. (SEIC - Free Report) and OM Asset Management plc . Both these stocks hold a Zacks Rank #2 (Buy).
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Affiliated Managers to Buy Minority Stake in 5 Hedge Funds
Affiliated Managers Group Inc. (AMG - Free Report) has announced a deal to acquire minority equity stakes in five alternative investment firms from Petershill Fund I. The company will be paying $800 million in cash for the stakes in U.K.-based Winton Capital Group Ltd., Capula Investment Management LLP and CapeView Capital LLP; and U.S.-based Partner Fund Management, L.P. and Mount Lucas Management LP. This news led to a 2.3% jump in Affiliated Managers’ share price.
Petershill Fund I is a group of investment vehicles managed by Goldman Sachs Asset Management, L.P., a division of The Goldman Sachs Group, Inc. (GS - Free Report) .
Deal Details
Affiliated Managers’ investment in the stakes representing 50% of deal value is expected to close by the third quarter of 2016 and the remaining by this year-end. Notably, the transaction is subject to customary closing conditions.
Following the closure of the deal, the senior management of each of these firms will continue to hold majority interest. Further, these firms will maintain “operating autonomy in the business under the same terms as the prior arrangements with Petershill Fund I.”
Moreover, upon closure, Affiliated Managers’ assets under management will increase $55 billion to roughly $700 billion (pro-forma as of Mar 31, 2016). Also, the company expects the deal to add economic earnings of 50-80 cents per share in 2017.
Affiliated Managers intends to fund up to 50% of the deal in equity. In a separate development, the company announced its plan to offer 2.5 million shares in public offerings, with underwriters being granted an option to purchase up to 375,000 additional shares.
Going Forward
Sean M. Healey, Chairman and Chief Executive Officer of Affiliated Managers said, “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 believe Affiliated Managers’ portfolio of investment products provides it a competitive edge when it comes to fulfilling the diverse needs of clients. Also, the company has an almost unbeaten track record of buying equity interests in asset management companies with strong performance-oriented products.
Healey further added “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.”
Currently, Affiliated Managers carries a Zacks Rank #3 (Hold). A couple of better-ranked finance stocks worth a look include SEI Investments Co. (SEIC - Free Report) and OM Asset Management plc . Both these stocks hold a Zacks Rank #2 (Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>