GAM is poised to acquire U.S.-based mortgage and asset-backed securities specialist Singleterry Mansley Asset Management.
Singleterry Mansleys' principals—Gary Singleterry and Tom Mansley—will join GAM's investment team bringing with them (subject to client approval) $397 million in assets. The value of the deal was not revealed.
GAM currently runs a $17 billion unconstrained bond strategy, and the acquisition will add a "specialist skillset" to this team.
Singleterry Mansley Asset Management was founded in 2002 and specializes in the evaluation and selection of complex mortgage and asset-backed securities based on analysis of macroeconomics, yield curves and underlying collateral structures. Their flagship managed account—which uses no leverage—generated net annualized returns of 13.7% from inception in October 2002 to 30 April 2014, with positive returns in every calendar year.
Singleterry Mansley invests in collateralized mortgage obligations guaranteed by government agencies, as well as in non-agency debt. Asset allocation and portfolio construction is driven by an analysis of interest rate, credit and prepayment risk and focuses on strong yield generation, liquidity and downside protection during sell-offs—an approach, which helped them to avoid exposures to sub-prime loans during the crisis.
Singleterry Mansley's offshore fund, launched in 2009, will be distributed under the GAM brand. In addition, in the coming quarter the group plans to launch a new dedicated GAM-branded UCITS fund based on the same unlevered strategy.
Singleterry and Mansley and their team will be based in New York, where GAM has had an office since 1989.