Man Group has acquired 25 per cent of BlueCrest Capital Management from Its principals for Ј105 million in cash and shares.
BlueCrest is a hedge fund manager focused on fixed income and currencies based in London with funds under management of US$3.1 billion. It has around 50 staff and is owned by the management.
Man says the acquisition is part of its strategy to continue to “access high quality managers with a material amount of additional capacity.” The deal gives Man preferential access to available capacity from BlueCrest. Man has invested in BlueCrest since its inception, through RMF.
“BlueCrest will help us to accelerate our growth of asset management capacity whilst diversifying our product range,” says Stanley Fink, Chief Executive of Man Group. “It is exciting to find a manager like BlueCrest which has critical mass as well as the potential to grow much further and this investment represents a significant opportunity for the two organisations to work together.”
The consideration consists of 4,959,210 new Ordinary Shares and cash of Ј33.3 million, to be found from existing resources. The acquisition is expected to be earnings enhancing, before the amortisation of goodwill, in the first full financial year, to 31 March 2005.
In the twelve months to 30 November 2003, the estimated share of profits to which Man would have been entitled for its 25% stake is Ј7.6 million before tax, of which Ј5.7 million is net management fee income. Management fees for the coming year are expected to be considerably higher.
“The BlueCrest team is delighted to be linking up with the Man Group,” says Mike Platt, founder of BlueCrest. “This transaction demonstrates our commitment to building a first class alternative asset management group and we look forward to working closely together.”
Merrill Lynch acted as financial adviser to Man, and Goldman Sachs International to BlueCrest
Founded in 2000, BlueCrest won the Eurohedge Fund of the Year Award in 2001 in its class, and a nomination for the same award in 2002. BlueCrest Strategic Limited targets higher risk and lower Sharpe ratio trades. It was launched at the beginning of July 2003 and has US$0.5 billion funds under management. The Blue Mountain Credit Alternatives Fund was launched on 1 November 2003 and will invest in structured credit as well as adopt credit arbitrage strategies. It has funds under management of US$0.3 billion and is managed out of a newly set-up New York office.