Man Acquires CLO Specialist Silvermine

Dec 18 2014 | 9:28am ET

The world's biggest publicly-traded hedge fund just got bigger: the Man Group has acquired Silvermine Capital Management.

Man will pay $23.5 million in cash up front for the Stamford, Conn.-based leveraged loan manager, plus two earnout payments—up to $16.5 million after one year, and up to $30 million after five years.

Silvermine, with $3.8 billion under management across nine active collateralized loan obligations as of end-November, is wholly-owned by the firm’s founders and senior staff members. The team of 17 focuses exclusively on managing U.S. levered credit portfolios and, since inception in 2005, has executed 16 separate transactions totaling $6.7 billion.

The acquisition is expected to be completed in the first quarter of 2015, subject to certain approvals, afte which Silvermine will be integrated into Man GLG and will operate as Man GLG Silvermine, complementing Man GLG’s existing credit business. Silvermine’s team will remain in place under the leadership of two of the firm’s founders, G. Steven Kalin and Richard F. Kurth, who will continue to work alongside the other co-founders Aaron Meyer and Jonathan Marks.

Man has been on something of a U.S. buying spree recently, having also acquired recent Pine Grove Asset Management, Numeric Holdings and the Merrill Lynch Alternative Investments fund of hedge fund portfolio. Man said the Silvermine acquisition will enhance the group's U.S. credit business and global CLO footprint.

Said Mark Jones, co-CEO of Man GLG, in a statement: “The acquisition of Silvermine will transform our existing credit business and position us to benefit from strong demand for US CLOs and other credit strategies. Silvermine is a highly respected, specialised business with an excellent track record of outperformance. As part of Man Group, Silvermine will benefit from our world class infrastructure, distribution and access to capital and we are confident that this acquisition will bring meaningful advantages to our investors by further diversifying our offering.”

Berkshire Capital Securities is acting as financial adviser to Silvermine.

As of September 30, 2014, Man Group’s funds under management were $72.3 billion.

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