(Bloomberg) -- Man Group, the largest publicly traded hedge fund manager, will buy fund-of-hedge funds assets from Merrill Lynch Alternative Investments to expand in the U.S.
Man Group’s FRM unit will acquire the contracts to manage Merrill’s $1.2 billion multi-strategy investments, the London-based firm said in a statement. Man will pay Merrill Lynch $2.9 million when the deal closes and 35% of the management fees generated annually for five years, not to exceed $30 million.
Chief Executive Officer Manny Roman has been expanding Man Group through acquisitions since he took over in February 2013. The firm, which managed $72.3 billion at the end of September, added more than $16 billion in assets this year after acquiring Pine Grove Asset Management, a New Jersey-based fund-of-hedge- funds manager, and Numeric Holdings, a Boston-based quant manager. The firm’s share price has risen 76% this year.
Man Group will continue to serve Merrill’s clients “while expanding the investor base globally as investors increasingly seek exposure to alternative investments,” said Michelle McCloskey, senior managing director of FRM, Man Group’s fund-of- hedge funds unit.
The Merrill assets are in 17 multi-manager hedge funds and managed futures fund of funds. The investments generated management fees of $6.2 million as of the end of October, according to the statement. The deal is scheduled to close in the second quarter of 2015, Man Group said.