Novato, CA-based Hennessy Advisors, Inc. has signed an agreement with FBR Fund Advisers, Inc. to buy the entire family of 10 FBR Funds, which currently have assets exceeding $1.9 billion, bringing total assets managed by Hennessy Advisors to over $2.7 billion after the deal.
Hennessy will initially pay $28.7 million for the assets. The deal is expected to be completed in the third quarter of 2012.
After the deal is completed, the assets related to the FBR Large Cap Fund, the FBR Small Cap Fund and the FBR Mid Cap Fund will merge into the Hennessy Cornerstone Large Growth Fund, the Hennessy Cornerstone Growth Fund and the Hennessy Focus 30 Fund, respectively. The remaining seven Funds will move under the Hennessy investment management umbrella, but will continue to be managed by the same portfolio managers that oversee the portfolios today.
Dave Ellison, FBR president and chief investment officer, and Winsor Aylesworth, FBR portfolio manager, will join the Hennessy team and continue the day to day management of the FBR Gas Utility Index Fund, the FBR Small Cap Financial Fund, the FBR Large Cap Financial Fund and the FBR Technology Fund.
The FBR Focus Fund will continue to be managed by David Rainey, Brian McCauley and Ira Rothberg, who will serve as sub-advisors to the Fund, with Hennessy Advisors as the investment manager. The FBR Balanced Fund and the FBR Core Bond Fund will retain their current sub-advisory relationships, with Hennessy Advisors as the investment manager. In addition to members of the portfolio management team, members of the current FBR distribution, marketing, trading, compliance and trading departments will also join the Hennessy team.
“We are absolutely thrilled to have the world-class FBR portfolio management team join our ranks and we look forward to strengthening our marketing and distribution, trading and compliance efforts through the addition of these FBR employees,” stated Neil Hennessy, chief executive officer of Hennessy Advisors.