Zurich headquartered GAM has announced the acquisition of Cantab Capital Partners (Cantab), a multi-strategy systematic manager based in Cambridge with $4bn (€3.6bn) in assets under management for institutional clients.
Established in 2006, Cantab runs two funds, the CCP Quantitative Programme and the CCP Core Macro Programme, seeking to deliver risk-adjusted returns that have low correlation to traditional assets.
GAM will fully acquire Cantab’s investment business, at the exception of 40% of future performance fees, which are retained by Cantab’s partners.
The deal consists of a cash payment of $217m (€195.7m) at closing and deferred consideration, based on management fee revenues, payable in 2018, 2019 and 2020.
The deferred consideration would reach around $75m (€67.6m), GAM estimated, relying on management fees figures of 2015.
GAM specified the consideration will be funded through the firm’s existing cash resources.
The deal, pending to regulatory approvals, is expected to close in the second half of 2016.
GAM has also announced the launch of GAM Systematic, an investment platform focusing on systematic products and solutions across liquid alternatives and long-only traditional asset classes including equities, debt and multi asset.
GAM said Cantab will form “the cornerstone” of GAM Systematic.
The new platform will complement GAM’s active discretionary investment offering and is set to serve as GAM’s innovation hub for the development of new technologies, investment ideas and approaches for systematic strategies and products.
Alexander Friedman, group chief executive officer of GAM, said: “We have been evaluating how best to enter the systematic space for the past 18 months because we believe it represents an important capability for an active investment firm in the current environment and in the decades to come.
“GAM Systematic will offer our clients a compelling range of unique products complementary to our strong discretionary product range at a time when the investment industry is challenged to provide cost-efficient, liquid and diversified sources of returns.”
“The market turmoil following the UK referendum last week has only reinforced our determination to pursue, and deliver on, our strategy of diversification and long-term growth.
“In Cantab we are acquiring industry-leading intellectual capital, a highly distinguished decade-long investment performance track record, and a profitable and scalable business. In combination with GAM’s global distribution reach, I am convinced that this business is well positioned for significant growth,” he added.
As of 31 March 2016, GAM has assets under management of CHF114.7bn (€105.5bn).