Morgan Creek Capital Management announced today plans to acquire the alternative funds business of Signet Capital Management.
Morgan Creek and Signet Capital deal:
Terms of the deal
As per the terms of the deal, Signet will transfer its funds and senior investment team to Morgan Creek. The firm’s current senior management team including Founder and Co-Head of Investment Management, Mr. Marquardt, and CEO and Co-Head of Investment Management; Dr. Serge Umansky will join Morgan Creek and continue with their present roles. As per the deal, Morgan creek will also take over the Signet’s offices in London and Lausanne, Switzerland.
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The deal, if it gets regulatory and other approvals, is expected to get completed by the second quarter. Since Signet Capital Management is regulated by the Financial Conduct Authority; approval of the same will be required to conclude the deal.
Morgan Creek Client Meeting
The company is having its shareholder meeting in North Carolina. A source of ValueWalk familiar with the matter comments that Morgan Creek believes the acquisition gives the fund of funds a great group of fixed income expertise and a big presence in Europe. Morgan Creek AUM is expected to be $7.2B after the deal closes. Morgan Creek is extremely bullish on Japan due mostly to massive monetary stimulus implemented by the Government.
What management has to say
Mark Yusko, the Chief Investment Officer of Morgan Creek told in a statement “”We are excited to have Bob, Serge and the entire Signet team join Morgan Creek and the company’s present and future clients will benefit from the experienced senior management team of Signet.” The acquisition is in line with the company’s overall strategy of expanding globally and rope in more professionals to provide support in addressing the complex global investment environment.
Signet’s founder and CEO told that Morgan Creek is a “tremendous investment firm” and both the firms share the same values and investment philosophies. “We look forward to adding value by integrating the expertise that Signet enjoys in fixed income instruments with Morgan Creek‘s highly popular “endowment style of investing.”
Signet’s, which is an award winning European-based institutional fixed income investment firm, alternative funds business has about $700 million of assets under management. Signet was founded by Robert Marquardt in 1993, which has transformed into a popular name in the European institutional investor community.
Recent Trends in the industry
The acquisition comes amid situations when the fund-of-funds industry is receiving heavy criticism from investors who are reluctant to shed extra money to invest in already-expensive hedge funds. The deal marks the latest trend where US managers are expanding operations in Europe.
In an earlier acquisition, in the fund-of-funds industry, private equity firm Kohlberg Kravis Roberts acquired Prisma Capital Partners. Earlier this week, there was news that Monarch Capital, which is a $5.5bn distressed debt hedge fund, plans to open an office in London. In March this year, US based Principal Global Investors acquired a 55 percent stake in London boutique Liongate Capital Management.
Further reading Morgan Creek Memo to Clients on The Great Rotation