Parametric Portfolio Associates will acquire The Clifton Group, a futures and options overlay and customized risk manager, before the end of the year.
Eighty percent of Clifton Group is owned by financial services firm Dougherty Financial Group and the rest by Clifton's three principals — Jack L. Hansen, chief investment officer; Thomas B. Lee, senior portfolio manager; and Kip Chaffee, managing principal.
Messrs. Hansen, Lee and Chaffee will exchange their Clifton stock for equity stakes within Parametric and will remain in their current positions under long-term employee contracts, confirmed Robyn Tice, a spokeswoman for Eaton Vance Investment Managers, Parametric's parent company.
Terms are not being disclosed until a Form 8-K is filed with the SEC within the next few days, said Ms. Tice.
The Clifton Group, which managed $33.4 billion as of Sept. 30 in funded and overlay assets for 180 institutional investors, will operate as a Parametric division under its own name from its Minneapolis office.
All of the firm's 49 employees will be retained.
Mr. Chaffee will report to Brian Langstraat, Parametric's CEO. Mr. Hansen will continue to oversee investment operations,
In a joint news release from Parametric and Eaton Vance, Mr. Hansen said Clifton Group's ability to help institutional investors “optimize their portfolio exposures, balance risks and control costs” would be “significantly enhanced” by joining Parametric. Mr. Hansen could not be reached for further comment.
Ms. Tice said Clifton Group will maintain its own three-person marketing staff, but added Parametric will market Clifton Group's risk solutions and overlay strategies to its current and new clients. The Clifton Group only has one non-U.S. institutional client at this time and Parametric officials expect its international clientele will be receptive to adding risk overlays to their portfolios, she said.
Parametric managed $53 billion as of Sept. 30 in quantitative equity and alternative investment strategies.