Man Group agreed to acquire Stamford, Conn.-based leveraged loan manager Silvermine Capital Management, the latest of four deals to expand its presence in the U.S.
The $72.3 billion hedge fund manager made a conditional agreement to acquire the $3.8 billion manager, which includes nine active collateralized loan obligation strategies.
Silvermine is wholly owned by its founders and senior staff members. The 17-member firm manages U.S. levered credit portfolios. A spokesman for Man Group said the firm does not expect any changes to the investment team at Silvermine.
Man Group has made an upfront payment of $23.5 million “to align its interests with Silvermine,” said a statement from the hedge fund manager. It will make a payment of up to $16.5 million on the first anniversary of closing, and up to $30 million on the fifth anniversary. These payments are expected to be paid in cash, but Man Group said, at its discretion, it may issue ordinary shares for payment as well.
The acquisition is expected to be completed in the first quarter of 2015.
Once complete, Silvermine will be integrated into Man Group subsidiary Man GLG, and will operate under the Man GLG Silvermine name. The spokesman said the GLG global credit team currently manages $7 billion in assets. The Silvermine team will remain in place under the leadership of G. Steven Kalin and Richard F. Kurth, two of the firm’s founders and managing directors.
The deal is the most recent of four acquisitions in the U.S. Man Group purchased Pine Grove Asset Management, Numeric Holdings and the Merrill Lynch Alternative Investments hedge funds-of-funds portfolio earlier this year.
“The acquisition of Silvermine will transform our existing credit business and position us to benefit from strong demand for U.S. CLOs and other credit strategies,” said Mark Jones, co-CEO of Man GLG, in the statement.
Berkshire Capital Securities is financial adviser to Silvermine.