Manning & Napier will acquire hedge fund manager 2100 Xenon Group to expand its alternative investment capabilities.
2100 Xenon will be merged into Manning & Napier by the end of the second quarter, subject to regulatory approval. James Mikolaichik, chief financial officer, Manning & Napier, declined to provide terms of the deal.
All of 2100 Xenon's 11 employees will join Manning & Napier and will remain in Chicago. No change is expected in the firm's three flagship strategies — global managed futures, long/short global fixed-income futures and futures alpha. Assets of the three strategies totaled $200 million under management as of Dec. 31, Mr. Mikolaichik said.
Jay Feuerstein, 2100 Xenon's founder, CEO and chief investment officer, will join Manning & Napier's senior research group as managing director of alternative strategies. Jeffrey Bolduc, the hedge fund manager's director of research and trading, will become a portfolio manager in Manning & Napier's alternative strategies group. Both positions are new.
Over time, the 2100 Xenon team likely will manage part of broader Manning & Napier client mandates with the hedge fund strategies operating as a hedge against rising interest rates, volatile equity markets and bear markets, Mr. Mikolaichik said. In addition to incorporating 2100 Xenon strategies into target-date funds for defined contribution plans, mutual fund vehicles also are under consideration.
“One attractive feature of this deal is that 2100 Xenon, which is fairly small, will benefit from being part of a much larger company with multiple distribution channels,” Mr. Mikolaichik said.
Manning & Napier had 507 employees and $52 billion under management in traditional long-only investment strategies as of Feb. 28.