Man Group PLC (LON:EMG) (OTCMKTS:MNGPF) is a world renowned hedge fund with $72.3 billion assets under management, which is based in the UK, as the largest publically traded hedge fund. The company has announced they have entered into an agreement with Silvermine Capital, a US leveraged loan management company, for as much as $70 million purchase price. Silvermine Capital focuses on credit investments solely in the US.
According to the agreement, Man Group will pay Silvermine $23.5 million in cash, with an additional $16.5 million after one year and $16.5 million after five years. The amounts will fluctuate depending on management fees. Once Silvermine is integrated, it will be renamed Man GLG Silvermine.
Man Group’s acquisition spree
Man Group PLC (LON:EMG) (OTCMKTS:MNGPF) CEO, Manny Roman, has been busy picking up acquisitions since taking over the chief executive position back in February 2013. Since then, we have seen Man Group acquire assets from Merrill Lynch Alternative Investments, purchase of Pine Grove Asset Management and a quant firm from Boston, Numeric Holdings.
Paul J. Isaac's Arbiter Partners returned -19.3% in the third quarter of 2021, according to a copy of the hedge fund's quarterly investor correspondence, which ValueWalk has been able to review. Following this performance, the fund's return sits at -1.6% for the year to the end of September. In comparison, the S&P 500 returned 15.9%, Read More
Man Group PLC (LON:EMG) (OTCMKTS:MNGPF) has certainly expanded its expertise with these acquisitions. The hedge fund now has a more solid footing in alternative investments, quant investments, an asset management company, and now a debt investing manager. This allows the hedge fund to not only diversify its offerings and personnel strength in a variety of investment areas, but with all the latest acquisitions being located in the US, Man Group is also adding exposure to US markets and certainly five acquisitions from the US shows that Man Group is confident on the outlook of the US economy and investment strength from the country. “It’s all about adding scale and diversification,” “they are paying such cheap prices for these that they can’t do too much damage,” says RBC Capital Markets analyst, Peter Lenardos.
Investors of Man Group PLC (LON:EMG) (OTCMKTS:MNGPF)’s stock in the UK are having a great year this year, as shares of the hedge fund have rallied 74% year to date. While the acquisition is set to close in the first quarter 2015, Man Group estimates that with all of its acquisitions this year, the hedge fund will see an additional $21.2 billion in assets under management. Overall, Man Group continues to focus on a diversification overhaul, as it continues to pick up specialized money management firms for relatively cheap valuations. While it is too early to tell what impact all of these acquisitions will have on Man Group, you can expect that the UK hedge fund will be a well-oiled machine once all the acquisitions are complete and fully integrated, giving them further reach on new markets and potential clients.