Morgan Stanley says that its Investment Management division (MSIM) will be acquiring FrontPoint Partners, a provider of absolute return investment strategies. FrontPoint has approximately USD5.5 billion in assets under management as of October 1, 2006, with 11 experienced teams pursuing 21 different investment strategies. The transaction is subject to certain consents and regulatory approvals and is expected to close in December 2006.
FrontPoint’s investment teams, which employ strategies that seek to deliver risk-adjusted absolute returns uncorrelated to broad market indices, will continue managing their respective funds once this acquisition is complete. The FrontPoint management and investment teams will also invest a significant portion of the proceeds from this deal in the FrontPoint funds.
“Morgan Stanley is committed to building a world-class alternative investment franchise and FrontPoint will be a cornerstone of that effort,” says Gil Caffray, a Managing Partner at FrontPoint. “Our investors will enjoy continued access to their current portfolio managers and we will significantly benefit from Morgan Stanley’s investment in our business, allowing us to expand our client-solutions capabilities by leveraging their powerful global platform.”