OppenheimerFunds has agreed to buy Tremont Advisers, a Rye, New York-based hedge fund firm. The deal, which offers $19 per share in cash, is expected to close in the beginning of the fourth quarter. In May, Tremont reported 6.98 million outstanding A- and B-class shares, making the deal worth $132.62 million in total.
Oppenheimer is clearly setting up camp in the high net worth sector; in today's Financial Times, new CEO John Murphy stated that his first priority is to expand the firm's separate account business and his second priority is to expand into hedge funds.
Tremont will become a wholly-owned subsidiary of Oppenheimer. Sandra Manzke, chairman and co-CEO, and Robert Schulman, co-CEO, will continue to run the company.
'The combination of Tremont Advisers' expertise in alternative investments with OppenheimerFunds' strength in distribution and product capabilities clearly marks a turning point in our business,' said Manzke, in a statement. 'Working together we have an unparalleled opportunity to tap the high-net-worth and institutional market and add a significant growth rate to an already rapidly growing business.'
While Tremont is known for developing products, it has only recently ventured into a more comprehensive distribution strategy, according to a Tremont spokesperson. With the acquisition, the firm will be able to leverage Oppenheimer's considerable distribution as well as facilitate the development of new products, particularly fund-of-funds.
'We believe Tremont's multi-manager, funds-of-funds approach to hedge fund investing will appeal to many of our high-net-worth shareholders,' said Murphy, in a statement. 'Tremont's unique product offerings in combination with our distribution network will open up the world of alternative investing to a new segment of investors.'