Affiliated Managers Adds To BlueMountain Investment

Jul 31 2012 | 10:57am ET

Affiliated Managers Group has boosted its stake in credit hedge fund BlueMountain Capital Management.

The Prides Crossing, Mass.-based firm, which invests in asset managers, said it had "significantly" increased its stake in New York-based BlueMountain, although it did not say how large its interest in the hedge fund was. Terms of the deal were not disclosed, other than that a "significant portion" of the proceeds would be invested in BlueMountain's funds.

AMG has been an equity investor in BlueMountain since 2007. As part of the deal, all eight members of the firm's management committee have signed or renewed long-term commitments to the firm, which will continue to operate independently. The increased AMG stake will not lead to any day-to-day changes in operations.

"Our goal in founding BlueMountain was to build an outstanding culture of innovation and risk management that would allow the firm to outperform and deliver strong returns for investors, regardless of market conditions," co-founder Andrew Feldstein said. "The partnership with AMG helps us execute that vision by more fully aligning management's long-term interests with those of our investors, providing capital to invest in BlueMountain products and enhancing our brand and distribution capabilities globally."

Separately, and less happily, AMG said its second quarter profit plummeted by more than 85%, from $45.5 million to $6.6 million, despite quarterly inflows to its portfolio firms of $7.1 billion, the firm's ninth consecutive quarterly net inflow. AMG's portfolio assets stand at $385 billion.

Despite the big decline, AMG's quarterly profit actually topped analysts' expectations, although its revenue did not, falling from $462.3 million to $429.6 million.

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