Man Group agrees to acquire NewSmith

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Man Group has entered into a conditional agreement to acquire the investment management business of NewSmith LLP, an equity investment manager with $1.2bn of funds under management.

NewSmith has offices in London and Tokyo and has four portfolio management teams with 15 investment professionals, investing in UK, European, Global and Japanese equities. The Firm is approximately 60% owned by its founders and senior staff members and approximately 40% owned by Sumitomo Mitsui Trust Bank Limited ('SuMi TRUST'), Japan’s largest institutional asset manager. Man Group has a long term collaborative relationship with SuMi TRUST which has indicated its strong support for the transaction and the intention to maintain its investment in the NewSmith funds.

The acquisition is expected to complete in the second quarter of 2015, subject to regulatory and other approvals. Upon completion, the four NewSmith strategies will be integrated into Man GLG, complementing Man GLG’s existing products in their respective areas. NewSmith Chairman Paul Roy and NewSmith CEO Ron Carlson will work with Man GLG over the next twelve months to ensure a seamless management transition and integration.

The transaction follows a number of strategic acquisitions announced by Man Group in 2014. The strategic rationale for the NewSmith acquisition includes:

  • Further expansion of Man GLG’s equities business, adding a complementary business and a pool of investment professionals with knowledge and experience of running strategies that fit within Man GLG’s offering;
  • Adding a high calibre, Tokyo based Japan Long Short Equity Strategy to Man GLG’s product line, enhancing Man GLG’s presence in a key market;
  • Continued strengthening of Man Group’s growing long-only platform; and
  • Providing further opportunity to manage funds for SuMi TRUST, a key client of Man Group.

Financial terms of the transaction were not disclosed.

Luke Ellis, President of Man Group, said, 'We believe that NewSmith is a highly complementary business for Man GLG. The acquisition brings a new dimension to the firm, including a Japanese hedge fund and an excellent team in Tokyo, as well as adding further scale to our London business. It is testament to the Man GLG team that we have received such a strong endorsement from SuMi TRUST, a key strategic partner of Man Group, and we are delighted that our relationship will be further enhanced following this acquisition'.

Paul Roy, Chairman of NewSmith, commented, 'This is an exciting development that benefits all parties involved. The ethos and professionalism of Man Group make it a natural home for NewSmith’s business and I look forward to working with them over the coming months to effect a smooth business transition'.

Pakenham Partners acted as financial adviser to SuMi TRUST in this transaction, whilst Goldman Sachs International acted as sole financial adviser to Man Group.

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