Pair of Private Equity Firms Complete Acquisition of American Beacon

Pair of Private Equity Firms Complete Acquisition of American BeaconIn this era of low interest rates and increasing interest in alternative investments, it’s no surprise that mergers and acquisitions activity has spilled over into the alternative asset management space. M&A isn’t just about large, publicly traded companies acquiring one another; but also smaller, private equity deals, where investment firms acquire and restructure businesses to improve their operations and profitability.

One such deal involving American Beacon Advisors, provider of investment advisory services to institutional and retail clients, recently closed. American Beacon, which also operates a series of mutual funds, was acquired by investment funds affiliated with Kelso & Company and Estancia Capital Management, two prominent private equity firms. Terms of the deal, which was originally announced in November 2014, weren’t disclosed.

“I want to thank TPG Capital and Pharos Capital Group for their support and guidance over the years,” said American Beacon CEO Gene Needles, in an April 30 statement. “I also want to thank all the individuals involved in making this a seamless process for our clients, shareholders and employees.” Mr. Needles added that he was “excited” to begin the next phase of American Beacon’s “growth story” with the new private equity partners.

American Beacon is of particular interest to alternative investors due to its American Beacon AHL Managed Futures Strategy Fund (AHLAX), launched in August 2014; and a pair of additional alternative mutual funds it plans to launch soon. As of April 30, the Managed Futures Strategy Fund had six-month returns of 12.58%, ranking in the top 38% of funds in Morningstar’s Managed Futures category.

American Beacon’s funds all employ a “manager of managers” style, with some funds having a single manager and other funds employing multiple managers. In addition to its one released and two pending alternative funds, American Beacon also operates international and domestic equity, fixed-income, and money market funds. As of March 31, the firm had a total of $62.9 billion in assets under management.

“The American Beacon team has built an exceptional investment management firm by partnering with the ‘best of the best’ institutional asset managers globally and creating well-designed, differentiated investment strategies that have delivered outstanding long-term performance to the firm’s clients,” said Takashi Moriuchi, Partner and Managing Director of Estancia Capital Management, one of American Beacon’s two new private equity partners.

Mr. Moriuchi also added that his firm has no plans to change or interfere with American Beacon’s business approach or strategies. Chris Collins, Managing Director of Kelso & Company, agreed: “American Beacon has established itself as a premier asset management platform, and we look forward to supporting the company in its next phase of growth,” he said.

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