Swiss asset manager swallowed
A leading Swiss hedge fund manager has been snatched up by a British investor group in a deal that will create the world's largest fund manager.
Man Group will double its assets under management to almost $20 billion (SFr31 billion) through the purchase of RMF Investment Group paying $833 million in cash and stock for the Swiss company.
"It is an extremely low-priced acquisition for what is an extremely fast growing business," said Man's Chief Executive Stanley Fink.
The purchase lifts Man's hedge fund assets above that of UBS, which has around $6 billion in funds.
Man, formerly in the sugar trading business, is offering $510 million in cash and 23.3 million shares for RMF, and said the deal would boost earnings from 2004.
Under the terms of the deal, RMF founders Rainer-Marc Frey and Adrian Gut will remain with Man for at least three years.
High margin business
Analysts say the acquisition shows that there is continuing interest in the hedge fund sector, where many firms have been trying to win a share of the high margin business.
Two of RMF's clients, Swiss Life and Credit Suisse Group, account for about 60 per cent of the firm's funds under management. Fink said much of that money is committed for several years and that Man could easily find new clients if it lost those two.
"We believe that the whole industry will be short of capacity in three or four years" because of fast growth in demand for alternative investment funds, he said.
RMF, headquartered in Zurich, employs 180 people. The company, founded ten years ago, made profits of $40.1 million last year.
Man said it expects to complete the purchase of RMF by the end of this month.
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