Man Group reached a conditional agreement to acquire a majority stake in Boston-based quantitative equity manager Numeric Holdings in a deal that reinforces the hedge fund manager's existing quant business and presence in the U.S.
The $55 billion hedge fund said in a statement Thursday that it would pay $219 million in cash at completion of the deal. Up to a further $275 million is payable to a group of the Numeric management team and employees following the fifth anniversary of completion, under an option arrangement, said a news release. The further payment is dependent on the profitability of the business.
Under the terms of the agreement, Numeric management retains an 18.3% equity interest in the business. Man Group can acquire this interest at the end of the fifth year through a put and call option structure. Completion of the deal, which is subject to certain conditions, is expected in September.
Further details of the deal could not be learned.
Numeric has $14.7 billion in assets under management. The deal complements Man Group's existing quant business, AHL, and will create a manager with more than $25 billion in assets.
Barclays served as adviser to Numeric. Milbank, Tweed, Hadley & McCloy advised Man Group.
"The transaction provides us with the opportunity to advance two of our core strategic objectives: first, to build a diversified quantitative fund management business with significant assets in fundamentally based quantitative strategies; and second, to develop further our presence in the U.S. market," said Manny Roman, CEO of Man Group, in the release.
A spokeswoman for Man Group confirmed the deal.