Man Group Acquires Boston-Based Quant Shop Numeric

Jun 19 2014 | 11:05am ET

Man Group is expanding its quantitative investment platform with the acquisition of the $1.47 billion Boston-based quantitative equity manager Numeric Holdings.

Man will pay $219 million—from its existing cash resources—upon completion of the transaction while Numeric management will retain an interest in the firm which Man will be able to acquire at the end of the fifth year following completion through a put and call option structure. Man said it could pay up to an additional $275 million for management's stake although the agreement depends upon the run-rate profitability of the business.

The Numeric acquisition will create a global quantitative investment platform, including AHL/MSS, with over $25 billion of funds under management and a broad product range across alternative and long only, trend following, technical and fundamentally based quantitative strategies.

Based on annualized returns, over 95% of Numeric’s current strategies have historically outperformed their selected benchmark over one, three and five years years and all Numeric long-only strategies covered by eVestment rank in the top quartile of their respective peer groups over the same periods.

Said Man Group CEO Manny Roman, in a statement:

“We are delighted to announce the acquisition of Numeric, which has an excellent track record of performance and innovation in quantitative investing. The transaction provides us with the opportunity to advance two of our core strategic objectives: first, to build a diversified quantitative fund management business with significant assets in fundamentally based quantitative strategies and second, to develop further our presence in the US market. Man’s strategy is to provide the optimal infrastructure and environment for its investment divisions, enabling entrepreneurial asset management focused on delivering attractive risk-adjusted performance for clients. Numeric is well positioned to benefit significantly from our scale and resources.”

Completion is subject to certain conditions, including the approval of Man Group’s shareholders, and is currently expected in September 2014.

Man Group is expected to have pro forma surplus capital of approximately $250 million after the acquisition, taking into account the $115 million share repurchase program announced earlier this year.
 
Said Mike Even, Numeric CEO, in a statement:

“Man stood out to us as a perfect strategic partner and today’s announcement signifies the full support of Numeric’s management team. Our key criteria from the outset was to find a new partner with a strong cultural fit who would preserve complete independence of our investment process and provide strategic support.  We are excited and energized by this transaction and look forward to serving our clients with the support of Man.”


In Depth

GSAM's Papagiannis: Liquid Alternatives For The Long Run

Apr 21 2017 | 8:44pm ET

Interest in liquid alternatives cooled a bit last year amid a broad shift in investor...

Lifestyle

Aston Martin Returns To Debt Market As DB11 Drives Turnaround

Mar 31 2017 | 5:21pm ET

James Bond’s preferred carmaker is returning to the public debt markets for the...

Guest Contributor

Debunking Conventional Investment Wisdom (Part II)

Apr 17 2017 | 5:56pm ET

The alternative investment industry is currently replete with buzzwords around data...

 

From the current issue of