KKR Prisma, PAAMCO Complete Merger To Create $30B Alternatives Company

Jun 2 2017 | 5:23pm ET

Fund of hedge funds manager Pacific Alternative Asset Management Company has completed its strategic transaction with KKR’s hedge fund allocation unit Prisma Capital Partners (PAAMCO).

The transaction, which was announced in February, created a firm with more than $30 billion in AUM and a significant presence in the fund-of-funds and liquid alternative sectors.

Leadership of the combined firm, named PAAMCO Prisma, will be split between Jane Buchan, who continue as CEO of the PAAMCO business, and Girish Reddy, who will continue as CEO of the Prisma business, according to a statement. The two brands are expected to continue side-by-side, with core investment and client teams remaining in place. 

The business is majority employee-owned, with employees of PAAMCO Prisma Holdings owning 60.1% of the business and KKR owning a 39.9% interest as a long-term strategic partner, the statement added. 

Each firm brings with it a track record of performance and leadership in alternatives, as well as innovative alpha strategies such as Prisma Apex Tactical (Prisma's unconstrained thematic strategy) and Horizons (PAAMCO's liability-driven investing approach).

Founded in March 2000, PAAMCO is a private institutional investment firm with $24 billion of alternative asset AUM, while KKR Prisma has approximately $10 billion in AUM and constructs and manages customized hedge fund portfolios and other liquid alternative investments.

KKR acquired Prisma, which was founded in 2004 by Reddy and two of his former Goldman Sachs colleagues, Thomas Healey and Gavyn Davies, in 2012 as the company sought to expand beyond private equity and into hedge funds.

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