Man Group has agreed to fully acquire Aalto, a US and Europe-based real asset manager with US$1.7bn (€1.5bn) of assets under management.
The deal is expected to be completed in January 2017, subject to regulatory approval. Man Group will pay US$25m (€22.7m) to purchase Aalto, to be settled two thirds in cash and one third in new Man Group ordinary shares, the company said in a statement.
Established in 2010 by Mikko Syrjänen and Petteri Barman, Aalto specialises in the management of real estate equity and debt strategies including direct investments in single family homes in the US and lending to commercial and residential real estate in Europe and the US.
Aalto has 33 employees and is headquartered in London, with offices in the US and Switzerland.
Aalto will form the real assets platform of Man Global Private Markets (Man GPM) that Man Group just launched to provides clients with access to strategies across private markets such as real estate, credit, and infrastructure.
Man Group said that it believes that building a private markets business over time represents an attractive opportunity for clients and shareholders.
The Aalto management team will still be led by Barman and Syrjänen.
In addition, both will be appointed co-heads of Real Assets within Man GPM, taking on a broader role in the strategic development of Man GPM’s offering in real assets. They will report to Jonathan Sorrell, president of Man Group, and will join Man Group’s executive committee.
No change will be made to Aalto’s investment process and investment independence will be maintained.
Commenting on the purchase, Luke Ellis, chief executive of Man Group, said: “The acquisition of Aalto will be instrumental in the development of Man Global Private Markets, our new private markets capability. In line with our strategy to continue to diversify the firm and our offering for clients, this private markets capability is complementary to our broad offering in liquid strategies.
“As co-heads of Real Assets, Petteri and Mikko will work with Jonathan Sorrell to help to grow this area of the business, which will offer investors exposure to longer duration capital products and benefit from Man Group’s infrastructure, broad investment expertise and global resources.”
Petteri Barman, co-Founder and chief investment officer of Aalto, added: “Joining Man Group is a compelling opportunity for us and our investors, as we believe that the firm is the ideal strategic partner for the next phase of Aalto’s development.
“The firm has a history of successfully integrating complementary businesses, while recognising and supporting their individual expertise, investment processes, and culture.”
As at 30 September 2016, Man Group’s assets under management were US$80.7bn (€73.3bn).