Mesirow Financial has agreed to buy a team from The Cambridge Strategy (Asset Management), a London-based investment firm focused on currencies, about a year after hiring a new head of its financial currency management business.
The deal will expand Mesirow's core risk management offering with “alpha strategies for return-seeking investors,” according to a statement Monday from the Chicago-based investment and advisory services firm. Terms of the purchase agreement weren't disclosed.
There's another benefit of the purchase for Mesirow's clients. The $3 billion of assets managed by The Cambridge Strategy have a low correlation to equities and bonds, which is appealing to investors in today's markets, according to Joseph Hoffman, the CEO of the firm's financial currency management group who was hired in August.
“With equity valuations at all-time highs and bond yields near historic lows, investors are searching for quality, alternative return sources that demonstrate low correlation to mainstream asset classes,” Hoffman said in the firm's statement.
A survey from Casey Quirk in 2017 predicted that more mergers and acquisitions would take place in the asset management industry this year to help firms gain a competitive edge. The purchase will take Mesirow’s global currency assets to $83 billion while providing clients with returns tied to currency investments — an offering that will complement the firm's existing risk-management strategies that use currencies as an investment hedge.
“Mesirow does a fantastic job with currency risk management, but we wanted to get a currency return strategy,” Hoffman said by phone Monday. “Late last year the opportunity presented itself.”
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Other asset managers have announced deals this year. For instance, in April, BlackRock said it was buying Tennenbaum Capital Partners for undisclosed terms, and in May, LaSalle Investment Management agreed to purchase the real estate multi-manager business of rival Aviva Investors for an undisclosed price.
Mesirow has also been a seller this year's deal making. In March, the firm agreed to sell its multi-manager hedge fund business to Lighthouse Investment Partners for undisclosed terms. Mesirow had about $31 billion of assets under advisement at the end of June, according to its website.