Publications

(Article from Registered Funds Alert, November 2015)

For more information, please visit the Registered Funds Alert Resource Center.

M&A Transactions

• Janus Capital Group Inc. announced and closed the acquisition of a 51% interest in Kapstream Capital Pty Limited, a global unrestrained fixed income asset manager with approximately $6.6 billion in assets under management. With this transaction, the total Janus Global Macro Fixed Income assets under management increased to approximately $8.7 billion. The transaction included initial upfront cash consideration of approximately $85 million. Janus has the option to purchase the remaining 49% interest in the future.
• F-Squared Investments announced that it entered into an asset purchase agreement with Broadmeadow Capital, LLC, a wholly owned subsidiary of Cedar Capital, LLC, which will acquire the intellectual property, investment strategies and substantially all of the investment contracts of F-Squared.
• Eagle Ridge Investment Management, LLC, an independent advisory firm headquartered in Westport, CT, and Laidlaw Group, LLC, an investment adviser headquartered in Bedford Hills, NY, announced that they merged effective July 1, 2015. The combined firm, which will be known as Eagle Ridge Investment Management, LLC, will have approximately $550 million in assets under management.
• BT Wealth Management LLC, an independent adviser providing fee-only wealth management services to high-net-worth individuals and families and an affiliate of Atlanta-based certified public accounting and consulting firm Bennett Thrasher LLP, announced that it acquired Excelsia Investment Advisors. With the addition of Excelsia, BT will have more than $350 million in assets under management.
• Ares Management, L.P. and Kayne Anderson Capital Advisors, L.P. announced that they had entered into a definitive merger agreement to create Ares Kayne Management, L.P., which would have become one of the largest and most diversified alternative asset managers with combined assets under management of approximately $113 billion. Under the terms of the agreement, Ares would have provided $2.55 billion in consideration, the majority of which would have been in the form of Ares Operating Group Units. On October 27, 2015, the parties announced the termination of the merger agreement.
• Titan Advisors, LLC, which focuses on the liquid long/short equity and global macro CTA sectors, announced that it completed the acquisition of Saguenay Strathmore Capital, a leading fund of hedge funds business with a 13-year track record and an emphasis on credit-related strategies.
• Gávea Investimentos Ltda, a Brazilian investment firm based in Rio de Janeiro with approximately $5.3 billion in assets under management, announced that its founders reached an agreement to buy back the fund manager from JPMorgan Chase & Co., which had initially acquired 55% of Gávea in 2010 and had since exercised its option to purchase the remaining 45% of Gávea. The deal calls for JPMorgan to be paid over the next 10 years with part of Gávea’s earnings.
• Federated Investors, Inc., one of the nation’s largest investment managers, completed a transition of approximately $4 billion in shareholder accounts from Reich & Tang’s domestic and offshore money market funds into Federated funds with similar investment strategies.
• Legg Mason Inc., a global asset management firm with approximately $699 billion in assets under management, reported that it agreed to acquire a majority interest in RARE Infrastructure, Ltd., an Australia-based alternative asset manager with approximately $7.6 billion in assets under management. Legg Mason will acquire a 75% equity stake in RARE, while RARE’s management team will retain a 15% equity stake, and The Treasury Group, a previous minority holder, will retain a 10% equity stake. Following the closing of the deal, RARE will operate as an independent investment affiliate of Legg Mason.
• American International Group, Inc. announced that it will acquire First Principles Capital Management, LLC, a privately held investment management firm. First Principles is a fixed income investment manager and has approximately $10 billion in assets under management.  Following the consummation of the transaction, First Principles will operate as a wholly-owned subsidiary of American International Group, Inc.
• Sun Life Financial Inc., an international financial services organization that provides financial services to both individuals and corporate customers, announced that it completed its purchase of Prime Advisors, Inc., a Washington-based investment advisory firm with approximately $13 billion of assets under management as of June 30, 2015. Prime Advisors will maintain its brand and continue to operate as a standalone unit but will also be a member company of Sun Life Investment Management platform, which provides investment solutions to institutional investors on behalf of Sun Life.
• Pramerica Asset Managers Pvt Ltd. entered into a definitive agreement with Deutsche Bank to acquire its asset management businesses in India. Deutsche Asset Management India was established in 2003 and is the second-largest foreign-owned asset manager in the country.
• Apollo Global Management, LLC, a global alternative investment manager with assets under management of approximately $162 billion, announced that it intended to acquire a majority interest in AR Global Investments, LLC, a new company that would own a majority of the ongoing asset management business of AR Capital. The acquisition would have more than doubled Apollo’s real estate assets under management to approximately $27 billion. On November 9, 2015, the parties announced that they terminated the acquisition agreement.
• Bronfman E.L. Rothschild LP, a wealth management advisory firm and a registered investment adviser, acquired Highline Wealth Management LLC, which together will manage more than $3.6 billion.
• United Capital Financial Advisers LLC, a financial management firm with approximately $15 million in assets under management, acquired Seneca, North Carolina-based McDonald, Cox & Klugh, Inc. The acquisition includes approximately $415 million in assets under management.
• Aberdeen Asset Management Inc., an independent asset management company formed in 1983 and based in Aberdeen, Scotland, announced that it entered into an agreement to acquire Arden Asset Management LLC, a provider of hedge fund solutions with offices in New York and London. Aberdeen manages approximately $480 billion on behalf of institutional and private investors. 
• Keeley Asset Management Corp., a privately owned Chicago-based asset management firm with over $4.0 billion under management, announced that it entered into a definitive agreement for the transfer of the voting shares of its parent company, Joley Corp., to TA Associates, a global growth private equity firm which has invested in more than 450 companies and raised $18 billion in capital.
• BlackRock, Inc. announced that it entered into a definitive agreement to acquire digital wealth management firm FutureAdvisor, a San Francisco-based registered investment advisory firm that uses software to actively monitor and manage its clients’ 401(k), IRA and taxable accounts. After the closing of the transaction, FutureAdvisor will operate within BlackRock’s Solutions platform.
• Savant Capital Management, one of the nation’s largest independent registered investment advisory firms headquartered in Rockford, IL, announced plans to acquire The Corcoran Group, a Bethesda, MD-based, RIA firm that has primarily served high to ultra-high net worth, senior level corporate executives for publicly traded and private equity companies for more than 25 years.
• Federated Investors, Inc. reached an agreement to acquire certain assets of Huntington Asset Advisors. Approximately $236 million in prime money market assets will be reorganized from the Huntington Money Market Fund into Federated Prime Cash Obligations Fund, and approximately $870 million will be reorganized from the Huntington U.S. Treasury Money Market Fund into Federated Treasury Obligations Fund.
• OppenheimerFunds, a leader in global asset management, announced its agreement to acquire VTL Associates, LLC, an independent institutional investment firm best known for its RevenueShares exchange traded funds and which manages $1.7 billion for investors across eight exchange traded funds and its separate accounts. The acquisition expands OppenheimerFunds’ active client offering into the growing smart-beta space, subject to customary closing conditions and consents.
• Markel Corporation, a financial holding company, entered into an agreement with CATCo Investment Management Ltd. to acquire all of the assets of CATCo, a specialist investment management business that manages approximately $2.7 billion of retrocession and traditional reinsurance portfolios. Upon completion of the transaction, the business will operate as Markel CATCo Investment Management Ltd.
• NewStar Financial Inc. announced its agreement to acquire Feingold O’Keeffe Capital, LLC d/b/a FOC Partners, a private alternative asset management firm based in Boston, Massachusetts. The acquisition will add approximately $2.3 billion to NewStar’s assets under management, increasing total pro forma AUM to approximately $6.4 billion.
• General Electric Co. agreed to sell its private-equity investment group, GE Capital Equity, to French asset manager Ardian. The management group in charge of GE Capital is expected to remain in place after the closing. The sale follows GE’s withdrawal from the alternative investment field. GE agreed in April of 2015 to sell most of its real estate portfolio to Blackstone Group LP and Wells Fargo & Co. for $23 billion.
• Independent Financial Partners, an investment adviser and wealth management firm in Tampa, FL, announced that it merged with institutional advisor Private Wealth Alliance LLC, an RIA based out of Ft. Lauderdale, FL, with a team of 40 investment professionals who manage more than 5,000 clients and more than $500 million in assets under management. Independent Financial Partners will now have access to Private Wealth Alliance’s bank relationships, which consists of community and regional banks and credit unions with assets ranging from $200 million to $21 billion.
• Rothschild Merchant Banking, the merchant banking arm of Rothschild, announced that it acquired West Gate Horizons Advisors, LLC, a Los Angeles-based credit manager that specializes in leveraged loans and related assets with approximately $1.5 billion in assets under management across 5 collateralized loan obligation structures. Post-transaction, West Gate Horizons Advisors is a wholly owned subsidiary of Rothschild North America.
• CAPTRUST Financial Advisors entered into a definitive agreement to merge Parker Carlson & Johnson Investment Management, a Dayton, Ohio-based wealth-management and investment advisory firm, into its wealth management practice. CAPTRUST is an independent investment research and fee-based advisory firm headquartered in Raleigh, North Carolina that provides retirement plan and investment advisory services to retirement plan fiduciaries, executives and high-net-worth individuals; it currently represents about $176 billion in client assets.

Closed-End Fund Initial Public Offerings

• First Trust Dynamic Europe Equity Income Fund (NYSE: FDEU)
  • Amount raised: $330 million
  • Investment Objective/Policies: The Fund’s investment objective is to provide a high level of current income with a secondary focus on capital appreciation. Under normal market conditions, the Fund will seek to achieve its investment objective by investing at least 80% of its Managed Assets in a portfolio of equity securities of European companies of any market capitalization, including, but not limited to, common and preferred stock that pay dividends, depository receipts and real estate investment trusts. The Fund will seek to focus its equity investments on income-producing securities. The fund will utilize a dynamic currency hedging process, which will include, at the discretion of the portfolio managers, the use of forward foreign currency exchange contracts to hedge a portion of the Fund’s currency exposure.
  • Managers: First Trust Advisors L.P. and Henderson Global Investors (North America) Inc.
  • Book-runners: Wells Fargo Securities, Morgan Stanley, and UBS Investment Bank
• Nuveen High Income 2020 Target Term Fund (NYSE: JHY)
  • Amount raised: $124 million
  • Investment Objectives/Policies: The Fund’s investment objectives are to provide a high level of current income and to return $9.85 per share to holders of common shares on or about November 1, 2020. The Fund seeks to identify securities across diverse sectors and industries that the portfolio managers believe are undervalued or mispriced. In seeking to return the target amount of $9.85 per share to investors on or about the Termination Date, the Fund intends to utilize various portfolio and cash flow management techniques, including setting aside a portion of its income, retaining gains and limiting the final maturity of any holding to no longer than May 1, 2021. As a result, the average maturity of the Fund’s holdings is generally expected to shorten as the Fund approaches its Termination Date, which reduces interest rate risk over time.
  • Managers: Nuveen Fund Advisors and Nuveen Asset Management
  • Book-runners: Morgan Stanley, RBC Capital Markets, and Nuveen Securities