Federated Investors, Inc. has completed its purchase of the London-based liquidity and fixed-income product manager Prime Rate Capital Management.
The English investment manager will be now known as Federated Prime Rate Capital Management and will continue to be led by Dennis Gepp, managing director and chief investment officer of cash, who was also a founding partner of the firm. The business and all of its employees will operate as a subsidiary of Federated Holdings (UK) Limited and Federated Global Holdings LLC, each group being companies of Federated Investors, Inc.
Details of the deal, in which Federated bought the firm from British holding company Matrix Group Limited, were not disclosed.
"Incorporating the experienced PRCM cash management team into Federated’s cash management business strongly positions us for future growth in Sterling, Euro and U.S. dollar-denominated UCITS products," said Gordon J. Ceresino, president of Federated International Management Limited, in a statement. "We continue to seek opportunities to expand Federated's global business in Europe and around the world."
The acquisition allows Federated to grow its presence in Europe with a family of U.K.-domiciled UCITS products, with UCITS standing for Undertakings for Collective Investment in Transferable Securities—pan-European investment funds.
These funds include the newly branded Federated Prime Rate Sterling Liquidity Fund, Federated Prime Rate Euro Liquidity Fund and Federated Prime Rate U.S. Dollar Liquidity Fund, among others.
Meanwhile, Federated Prime Rate Capital Management's AAA-rated liquidity funds, known as Qualifying Money Market Funds, serve the corporate and institutional market. The funds, totaling nearly $4.0 billion USD (GBP 2.5 billion) in assets, are rated AAA by both Standard & Poor's and Fitch Ratings.
Federated Investors manages $369.7 billion in assets as of Dec. 31, 2011, with 134 funds, including a family of Irish-domiciled UCITS products, as well as a variety of separately managed account options. It has $192.5 billion USD (GBP 121 billion) in AAA-rated money market funds.
"Our clients will benefit from Federated's stewardship, management and stringent credit research," said Gepp in a statement. "As part of the global Federated enterprise, we will continue our time-tested principle of seeking to manage clients' money to preserve capital, maintain daily liquidity and maximize yields, using a disciplined approach that avoids speculative strategies and financial instruments."
The purchase is Federated’s second for the month, with the first being an acquisition of $5 billion of money market assets from four Fifth Third money market funds, which were then merged into four existing Federated money market funds.