Orbitex Management, Inc., and Saratoga Capital Management, have agreed to merge their fund families into a new entity called Orbitex-Saratoga Capital Management. The deal will roughly double the size of the fund family to $500 million in assets.
"It will give shareholders enhanced investment flexibility to invest their assets in a larger and more diverse choice of funds. Additionally, it will open up new distribution platforms for both Orbitex and Saratoga," said Richard E. Stierwalt, chairman and CEO of Orbitex Financial Services Group.
Bruce E. Ventimiglia, chairman, president, and CEO of Saratoga, will assume the same role with Orbitex-Saratoga Capital Management. Steven Ventimiglia, chief investment officer at Saratoga, will also act as CIO at the merged company.
Still, there are significant challenges ahead for the combined firms. "Neither one of them are significant players," said Geoff Bobroff, a fund industry consultant. "Orbitex is obviously more significant than Saratoga, but one plus one doesnt equal two."
While Orbitex has assumed a strategy of acquiring small funds, including many faltering tech offerings, Bobroff suggested that the company may be unable or unwilling to tackle a larger target. "Im not sure how much theres a stomach by the Swiss any more for making any significant investments in the U.S.," he said.