Man Group is to acquire fund of hedge funds rival Financial Risk Management, boosting its assets by $8bn.FRM will be integrated into Man's multi-manager business, run by Luke Ellis. The combined group's multi-manager operations will almost double from $10.9bn now to $19bn, making it the largest multi-manager hedge fund group outside the US.
The deal involves payments made over three years, comprising at most $82.8m in cash paid from Man's reserves, plus a 47.5% share of performance fees over three years from the funds FRM presently manages - as long as the group holds onto those assets in future - and capped at $60.8m.
Japan's Sumitomo Mitsui Trust Bank Limited, which advises a significant portion of FRM's investors and owns 4.95% of the company, has agreed to a new, 10-year strategic relationship agreement with Man. SMTB will exchange its FRM stake for a minority holding of preference shares in RBH Holdings (Jersey) Limited, a Man subsidiary.
