Publications

(Article from Registered Funds Alert, September 2015)

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M&A Transactions

• Beacon Trust Company announced the completion of its acquisition of The MDE Group, Inc., a nationally ranked, SEC-registered investment advisor based in Morristown, NJ and its affiliate, Acertus Capital Management, LLC. As of the closing date, the assets under management of the combined entities were approximately $2.5 billion.
• AMG Wealth Partners, LP, a subsidiary of Affiliated Managers Group, Inc. (NYSE: AMG), announced the completion of its investment in Baker Street Advisors, LLC, a San Francisco-based wealth management firm that provides customized wealth management and comprehensive investment advisory solutions to individuals, families and foundations. Founded by Jeff Colin in 2003, the firm advises on approximately $6 billion in assets.
• ALPS, a DST Company that provides products and services to the financial services industry, announced it has agreed to acquire asset manager Red Rocks Capital LLC, a leader in listed private equity and other private asset investments. The closing of the transaction is expected to occur in the second half of 2015. The purchase price of up to $65 million will consist of a combination of up-front cash consideration and performance-related contingent consideration. The transaction will be funded using a combination of cash and short-term borrowings on revolving credit lines.
• Focus Financial Partners, LLC, the leading international partnership of independent wealth management firms, announced that Classic Capital, based in Short Hills, NJ, has merged with Buckingham Asset Management, a Focus partner firm headquartered in St. Louis, MO. The merger brings Buckingham additional scale and increases its total locations to eight.
• Lightyear Capital LLC, a private equity firm specializing in financial services investing, announced that an affiliated investment fund signed a definitive agreement to purchase a majority equity stake in Wealth Enhancement Group, an independent wealth management firm with $4.7 billion in client assets. Financial terms of the transaction were not disclosed. Under the terms of the agreement, an investment fund affiliated with Lightyear Capital will purchase the equity stake currently held by Norwest Equity Partners, a Minneapolis-based middle market investment firm. A number of employees of Wealth Enhancement Group will continue to hold a stake in the firm.
• UniCredit, Santander Asset Management and affiliates of Warburg Pincus and General Atlantic signed a preliminary agreement to combine Pioneer Investments and Santander. The combined firm will have approximately €400 billion in assets under management and a presence in over 30 countries. The preliminary agreement contemplates the establishment of a holding company, with the name Pioneer Investments, which will control Pioneer’s operations in the United States along with the combination of Pioneer and Santander’s operations outside the United States.
• Hillspire LLC, an entity that serves as an investment vehicle for Google Inc.’s Executive Chairman Eric Schmidt and his family, bought a 20% stake in New York-based hedge fund firm D.E. Shaw Group. Hillspire purchased the stake from Lehman Brothers Holdings Inc. for approximately $500 million. Lehman Brothers Holdings Inc. had previously purchased its stake for approximately $750 million in 2007.
• Samsung Asset Management Co., Ltd, Korea, the largest asset manager in Korea, signed a Memorandum of Understanding for a strategic alliance with Reliance Capital Asset Management, part of Anil Ambani’s Reliance Capital and India’s largest asset manager.
• JHS Capital Advisors LLC, a registered securities broker dealer and registered investment adviser providing personalized client services for investors nationwide, announced it has signed a definitive agreement to have its retail assets acquired by Ameriprise Financial. The JHS retail brokerage and investment advisor network consists of approximately 150 advisors in offices around the country, and retail assets in excess of $4.1 billion.
• Wunderlich Investment Company announced the acquisition of Fiduciary Financial Services of the Southwest, a privately-held independent investment advisory firm based in Dallas, Texas, with over $400 million in assets under management. Fiduciary Financial will operate as a registered investment adviser subsidiary of WIC.
• Westaim Corporation, a publicly traded Canadian investment company, announced its entrance into a non-binding term sheet to acquire Arena Investors, LLC, a U.S. based investment firm specializing in asset-oriented credit investments. The term sheet also provides for the establishment and capitalization of a new, specialty finance company to be named Arena Finance Company. Westaim is expected to finance Arena Finance Company with $200 million.
• FolioMetrix LLC announced that it will merge with American Independence Financial Services, LLC to create a new company, RiskX Investments, LLC, offering an array of risk-intelligent investment solutions. The transaction is expected to close in September 2015. Deal terms were not disclosed. RiskX will manage, post-merger, approximately $1.1 billion in funds and separately managed accounts, comprised of the American Independence Funds (single-manager sub-advised funds and separately managed accounts) and the FolioMetrix Rx Fund Series (multi-strategy tactical mutual funds).
• Blackstone Group LP announced its acquisition of a minority stake in Illinois-based Magnetar Capital Partners. Blackstone bought the stake through its Strategic Capital Holdings fund, which has raised more than $3 billion to buy minority stakes in alternative-investment firms.
• Fortress Investment Group LLC (NYSE:FIG), a leading, diversified global investment management firm, and Mount Kellett Capital Management LP, a private, multi-strategy investment firm, announced they reached an agreement for an affiliate of Fortress to become co-manager with Mount Kellett of the Mount Kellett investment funds and related accounts (collectively, the “Funds”). Mount Kellett affiliates will continue to serve as general partner of the Funds. Additionally, affiliates of Fortress will become special limited partners of the Funds. Financial terms of the transaction were not disclosed.
• Aberdeen Asset Management PLC announced it entered into an agreement to acquire FLAG Capital Management, LLC, a manager of private equity and real asset solutions with offices in Stamford, CT, Boston, MA, and Hong Kong. As of December 31, 2014, FLAG managed assets of approximately $6.3 billion of invested and committed capital on behalf of its broad client base.
• Ohio National Financial Services acquired the remaining ownership interest in Fiduciary Capital Management, an asset management firm based in Wallingford, Connecticut. As of December 31, 2014, Ohio National had a total of $41.1 billion in assets under management.
• UMB Financial Corporation, a financial holding company headquartered in Kansas City, Missouri, announced the completion of its acquisition of Marquette Financial Companies in an all-stock transaction. As part of the acquisition, UMB acquired Marquette Asset Management, which provides private asset management to individuals, families and institutions, based in Minneapolis, Minnesota. UMB also acquired eight Marquette bank branches in the Phoenix area and five branches in Ft. Worth, Dallas and Denton, Texas.
• Habib Bank Limited Asset Management, the asset management subsidiary of Habib Bank Limited, announced that it would acquire 100% of the shares of Pakistan Industrial Credit and Investment Corporation Asset Management Company Limited.
• Washington Trust Bancorp, Inc., a bank holding company, announced that it agreed to acquire Halsey Associates, Inc., an investment advisory firm based in New Haven, Connecticut. Washington Trust will acquire all of the outstanding shares of Halsey capital stock for consideration consisting of cash and Washington Trust common stock.
• Hunt Companies, Inc., through its wholly-owned subsidiaries, has completed an investment in Amber Infrastructure Group Holdings Limited, headquartered in London, England. Hunt acquired a fifty percent (50%) ownership of Amber Infrastructure with an ability to appoint a majority of directors of Amber’s holding company.
• Stifel Financial Corp. announced its entrance into a definitive purchase agreement to acquire Barclays’ Wealth and Investment Management, Americas franchise in the U.S. As of May 31, 2015, Barclays had approximately 180 financial advisors in the U.S. managing approximately $56 billion in total client assets. In addition, Barclays’ business had balance sheet assets of approximately $1.4 billion and client loans of approximately $1.5 billion held through Barclays’ clearing firm. Barclays’ advisory business is concentrated in New York and 11 other major metropolitan cities in the U.S. As part of this agreement, Stifel will be the U.S. private wealth distribution partner for certain of Barclays’ equities and credit new issue securities in the U.S.
• BlackRock, Inc. entered into a definitive agreement to acquire Infraestructura Institucional, Mexico’s leading independently managed, infrastructure investment firm, expanding BlackRock’s infrastructure capabilities in Mexico.
• First Republic Bank, a leading private bank and wealth management company, and Constellation Wealth Advisors, one of the nation’s foremost independent wealth advisors, announced that First Republic Investment Management, Inc., a wholly-owned subsidiary of First Republic, would purchase Constellation Wealth Advisors for approximately $115 million, subject to the satisfaction of certain closing conditions.
• Federated Investors, Inc. announced the completion of its acquisition of certain assets of Touchstone Advisors, Inc. Federated is an investment manager with $355.8 billion in assets under management as of March 31, 2015. With 130 funds and separately managed account options, Federated provides investment management services to more than 7,700 institutions, including corporations, government entities, insurance companies, foundations and endowments, banks and broker/dealers.
• Neuberger Berman, one of the world’s leading private, employee-owned investment managers, announced an agreement with Merrill Lynch Alternative Investments LLC, the alternative investment business of Bank of America Corp., whereby Neuberger Berman will acquire the management rights to certain Merrill Lynch traditional non-registered and 40-Act-registered private equity fund of funds.
• Sun Life Financial Inc. announced that it reached an agreement to acquire Prime Advisors Inc., an investment management firm specializing in customized fixed income portfolios, with approximately $13 billion in assets under management. Sun Life is an international financial services organization with $813 billion in assets under management.

Closed-End Fund Initial Public Offerings

AllianzGI Diversified Income & Convertible Fund (NYSE: ACV)

• Amount Raised: $280 million
• Investment Objective/Polices: The Fund’s investment objective is to provide total return through a combination of current income and capital appreciation, while seeking to provide downside protection against capital loss. Under normal market conditions, the Fund will seek to achieve its investment objective by investing in a combination of convertible securities, debt and other income-producing instruments and common stocks and other equity securities. The Fund will normally invest at least 80% of its net assets (plus any borrowings for investment purposes) in a diversified portfolio of convertible securities, income-producing equity securities and income-producing debt and other instruments of varying maturities. It is expected that substantially all of the Fund’s debt instruments and a substantial portion of its convertible securities will consist of securities rated below investment grade or unrated but determined by Allianz Global Investors U.S. to be of comparable quality (sometimes referred to as “high yield securities” or “junk bonds”). The Fund also expects to normally employ a strategy of writing (selling) covered call options on the stocks held in the equity portion of the portfolio (the “Option Strategy”). The Option Strategy is designed to generate gains from option premiums in an attempt to enhance amounts available for distributions payable to the Fund’s shareholders.
• Managers: Allianz Global Investors Fund Management LLC and Allianz Global Investors U.S. LLC
• Book-runners: Merrill Lynch, Pierce, Fenner & Smith Incorporated, Wells Fargo Securities, LLC, Citigroup Global Markets Inc. and RBC Capital Markets, LLC

Eagle Growth & Income Opportunities Fund (NYSE: EGIF)

• Amount Raised: $127.5 million
• Investment Objective/Polices: The Fund’s investment objective is to provide total return through a combination of current income and capital appreciation. The Fund seeks to achieve its investment objective by investing, under normal market conditions, at least 80% of its Managed Assets (as defined in the prospectus) dividend or other income paying equity securities and debt securities, excluding securities that distribute a return of capital, original issue discount bonds and payment-in-kind (“PIK”) debt instruments. Debt securities may include, but are not limited to, below investment grade securities (commonly known as “high-yield” securities and “junk” bonds), notes, bonds, and convertible bonds. The Fund may invest up to 20% of its Managed Assets in a combination of below investment grade securities and debt instruments that generate PIK interest. Initially, the Fund expects to invest up to 15% of its Managed Assets in securities of master limited partnerships (“MLPs”), generally in the energy sector, and may invest up to 25% of its Managed Assets in preferred equity securities. The Fund may write (sell) covered call options with respect to up to 40% of its Managed Assets to seek to generate current income.
• Managers: Four Wood Capital Advisors LLC, Eagle Asset Management, Inc. and Recon Capital Partners, LLC
• Book-runners: Raymond James & Associates, Inc. and Stifel, Nicolaus & Company, Incorporated

Tekla World Healthcare Fund (NYSE: THW)

• Amount Raised: $580 million
• Investment Objective/Polices: The Trust’s investment objective is to seek current income and long-term capital appreciation. Under normal market conditions, the Trust expects to invest at least 80% of its Managed Assets in U.S. and non-U.S. companies engaged in the healthcare industries (“Healthcare Companies”), including equity securities, convertible securities and debt securities. The Trust will concentrate its investments in the healthcare industries. A company will be deemed to be a Healthcare Company if, at the time the Trust makes an investment in a company, 50% or more of such company’s sales, earnings or assets arise from or are dedicated to healthcare products or services or medical technology activities. Healthcare Companies may include companies in one or more of the following sub-sectors: pharmaceuticals, biotechnology, managed care, life science and tools, healthcare technology, healthcare services, healthcare supplies, healthcare facilities, healthcare equipment, healthcare distributors and healthcare REITs. Tekla Capital Management LLC (the “Investment Adviser”) determines, in its discretion, whether a company is a Healthcare Company.
• Manager: Tekla Capital Management LLC
• Book-runners: Wells Fargo Securities, LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated, Morgan Stanley & Co. LLC, UBS Securities LLC and Ameriprise Financial Services, Inc.