Merian Global Investors (MGI) has signed an agreement to acquire the top-performing multi-asset business from Kestrel Investment Partners.

The entire Kestrel multi-asset team will join MGI, including head of desk and lead fund manager John Ricciardi, as part of the deal which is expected to complete in December 2019, said Merian Global Investors (MGI) in a media statement. Ricciardi, the joint CEO of Kestrel, will report to MGI’s CEO, Mark Gregory.

«For some time we’ve been looking to selectively expand our investment proposition, aligned with client demand for differentiated, high-alpha active strategies that offer genuine portfolio diversification. The Kestrel multi-asset team’s proven process is hugely compelling and I’m delighted that we’ve signed an agreement to secure its best-in-class business,» said Gregory.

Investing Together

Ricciardi co-founded the business with the partners of Kestrel Partners LLP in 2011 and has over three decades of multi-asset investing experience, including six years as global head of asset allocation for Alliance Bernstein.

Joining MGI with Ricciardi are portfolio managers Ian Forrest and Dan Matthews. The three fund managers have been investing together for the past seven years, including developing a proprietary macro modeling system. The investment team will be accompanied by three system analysts who have played a key role in evolving the desk’s investment process. 

Capital Growth Target

Management of the $151 million Kestrel Global Portfolio will transfer to MGI as part of the transaction, as will the associated intellectual property. The fund will adopt the «Merian» naming convention immediately upon completion, with its new name announced in due course.

The fund aims to achieve capital growth by directly investing in a diversified portfolio of asset classes across global markets, using a repeatable process of quantitative macro modelling, combined with fund manager expertise. The team has an outstanding long-term track record, with the Kestrel Global Portfolio (I USD) delivering a compound annual return of 6.2 percent, compared to 2.4 percent for the peer index since inception.

Besides offices in London and Switzerland, the investment house also operates out of Hong Kong and Singapore. The acquisition is MGI’s first deal since it completed a management buyout in June 2018.