Swiss asset manager GAM is to buy its absolute return peer Arkos Capital, in a deal the target's chief investment officer said would open up new distribution opportunities for the mid-sized boutique.
Swiss asset manager GAM is to buy its absolute return peer Arkos Capital, in a deal the target’s chief investment officer said would open up new distribution opportunities for the mid-sized boutique.
It is at least the second time in GAM’s history the CHF 50.7bn manager has been regarded by a smaller acquisition target as an attractive partner for wider distribution.
Augustus Asset Managers, which GAM bought just as the 2008/2009 credit crisis ended, is understood also to have appreciated the distribution reach and larger distribution team available at GAM, at a time investor sentiment to hedge funds was expected to turn.
Gianmarco Mondani, Arkos’s chief investment officer, said: “Becoming part of GAM will allow us to make a great step forward, enabling us to offer our strategies to clients in new markets, such as Northern Europe, the US and Asia, as well as strengthen our access to institutions.”
Activities of sales and other support functions for Arkos will be supplemented from GAM’s Zurich and London offices.
The deal is expected to complete by the start of July. The transaction is for an undisclosed sum and still awaiting regulatory approval.
It will add CHF 664m to GAM’s total assets, as well as all of Arkos’s key personnel including eight investment professionals in Lugano, and absolute return funds focused on European and emerging markets equities, financial securities and convertible bonds.
GAM already has some long/short products focused on emerging markets, Europe and convertible bonds among its 60 distinct investment strategies.
GAM will acquire 74.95% of Arkos’s share capital immediately and the remaining 25.05%, currently held by Arkos’s management, through deferred cash payments linked to future development of the business.
Arkos has both onshore and offshore funds, which GAM says are characterised by low-volatility, liquidity and transparency.
Sometimes referred to as the ‘biggest manager you have never heard of’, Jonathan Boyd has caught up with PGIM for insight into its Europe region developments as part of global expansion