Man Group’s US foray continues with latest deal
HEDGE fund Man Group ploughed on with its US acquisition spree yesterday after paying $23.5m in cash for small fund manager Silvermine Cap Management.
The deal, Man’s fourth in the US this year, will earn Silvermine an additional $16.5m next year and $30m after five years if fee targets are hit.
Silvermine runs around nine debt funds, known as collateralised debt obligation funds and looks after $3.8bn for pension funds and rich clients.
The 17-man company will join Man’s hedge fund subsidiary Man GLG and rebrand as Man GLG Silvermine.
“The acquisition of Silvermine will transform our existing credit business and position us to benefit from strong demand for US CLOs and other credit strategies,” Man GLG co-chief executive Mark Jones said.
It joins the Stateside purchases of Pine Grove, Numeric and a portfolio from Merrill Lynch.
The group looks at around 200 deals every year proposed by M&A bankers and advisers, prime brokers and headhunters.
“Overall, the acquisition is relatively small but complements the expansion into the US, with the deal providing access to Silvermine’s distribution channel through investment banks,” JP Morgan told its clients in a note.
The deal will give Silvermine more scope to reach new regulatory requirements incoming in 2016.
The Dodds-Frank legislation requires managers to own at least five per cent of their overall assets under management.