Imation Launches Quant-Driven Investment Management Subsidiary

Feb 3 2017 | 10:04pm ET

Technology-turned-holding company Imation has launched an investment advisor unit that will focus on quantitative equity strategies, and will rebrand itself.

Imation, once a data storage business known for floppy disk drives, was the subject of an activist campaign by Clinton Group in 2015. 

The new business, named GlassBridge, is the result of the closing of a transformative, strategic transaction with Clinton Group, the company said in a statement. The partnership with Clinton will bypass traditional seeding models, which typically include a lengthy roll out and substantial costs.

GlassBridge plans to use algorithms and other quantitative strategies with the goal of achieving consistent, competitive risk-adjusted returns for GlassBridge's investors, a spokesperson said in an email to FINalternatives. In conjunction with the launch, Imation has successfully concluded the transition of its principal business activities to become a publicly-traded alternative asset manager and will rebrand itself into “Glassbridge Enterprises” later this year.

Terms of the launch enable GlassBridge to place up to $1 billion into Clinton's existing quantitative equity strategy for an initial term of five years. In addition, over the past two months, Imation has taken steps to build its own independent organizational foundation while utilizing Clinton's abilities and infrastructure, the statement said. While GlassBridge's intention is to primarily engage in the management of third-party assets, it may opportunistically make proprietary investments from time to time.

Imation’s status as a public company is an ideal platform from which to grow an asset management business, the company added. The existing reporting, compliance and other regulatory requirements to which Imation is subject provide transparency, which is intended to provide investors with insight, scrutiny and comfort. In addition, Imation's excess cash provides the potential to seed new investment strategies and effectuate accretive acquisitions.

"Over the past two years, Imation has undergone a significant transformation, eliminating money losing businesses and harvesting capital from non-core assets,” said Joseph De Perio, non-executive chairman of Imation. “Our new operating structure as a publicly-traded alternative asset manager furthers our evolution. In consummating this transaction with Clinton, we have established a turnkey business in GlassBridge that we believe will be the foundation for an enterprise that will deliver significant value creation for stockholders over the long term.”

The company also reported the appointment of Danny Zheng as Imation’s interim CEO. Zheng will continue in his role as CFO during the company’s search for a permanent leader.

Headquartered in Oakdale, Minnesota, Imation is a holding company actively exploring a diverse range of new, strategic asset management business opportunities for its portfolio. The company’s wholly-owned subsidiary, GlassBridge Asset Management, is an investment advisor focused on technology-driven and quantitative strategies. 

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