Alternative investment manager GAM will acquire quantitative hedge fund manager Cantab Capital Partners in a deal expected to close by year-end.
GAM will pay $217 million in upfront cash and additional deferred payments for Cantab, about $75 million based on 2015 management fee revenue. Cantab’s partners will receive 40% of future performance fees and have signed long-term employment agreements. Partners also will reinvest the majority of the proceeds from the sale into Cantab’s funds, confirmed Elena Logutenkova, a GAM spokeswoman.
GAM also announced the launch of GAM Systematic, the firm’s first dedicated quantitative investment platform with Cantab flagship hedge fund strategies — CCP Quantitative and CCP Core Macro — forming the core of the program, along with GAM’s existing alternative risk premium investment approach. Cantab manages about $4 billion.
Cantab’s 56 employees will join GAM and will continue to work from the firm’s Cambridge, England, headquarters. The firm’s proprietary technology infrastructure will be used for GAM Systematic offerings.
Cantab CEO Adam Glinsman and Anthony Lawler, head of portfolio management in GAM’s alternative investment solutions business, will serve as co-heads of GAM Systematic. Ewan Kirk, Cantab’s chief investment officer, will retain the same role in the quant unit and also will focus on research and development and risk management, Ms. Logutenkova said.
“We have been evaluating how best to enter the systematic space for the past 18 months because we believe it represents an important capability for an active investment firm,” said Alexander S. Friedman, GAM’s group CEO, in a company news release.
GAM manages $119.8 billion across its investment management strategies.