Knight Capital Group has agreed to acquire Astor Asset Management, a money management firm specialising in macro-economic strategy and ETF portfolio construction, for approximately USD20m in cash and stock, based on assets under management at the close.
"Astor Asset Management has undergone rapid growth by providing active management and diversification across sectors and asset classes at a relatively low expense ratio using ETFs," says Thomas M. Joyce (pictured), chairman and chief executive officer, Knight Capital Group. "Astor assets under management in the separately managed accounts and new mutual fund have increased substantially in the past few years. I believe we can help Astor get to the next level while creating a foundation for asset management that contributes stable, recurring revenues to Knight."
Founded by managing partner Robert N. Stein in 2001, Astor Asset Management seeks to identify fundamental economic shifts in order to provide retail and institutional investors with capital appreciation while managing risk in diverse market conditions.
The firm uses macro-economic models to construct portfolios of ETFs which are offered through advisers within separately-managed accounts and the Astor Long/Short ETF Mutual Fund.
Based in Chicago, Astor has 13 employees and approximately USD560m in assets under management.
"I’m excited by the growth potential for Astor as a part of Knight, considering the firm’s longstanding relationships with the leading wirehouses and broker-dealers," says Stein. "Backed by the resources and infrastructure of Knight, I believe we’ll be able to provide an even higher level of client service while adding to the product offering. My colleagues at Astor and I look forward to continued success at Knight."
The terms of the agreement include a four-year employment contract for Stein. The closing of the acquisition is subject to customary closing conditions and Astor Asset Management advisory client approval.
The acquisition is expected to be completed in the fourth quarter of 2010 and accretive to Knight’s earnings per share in 2011.
Upon the close of the acquisition, Astor Asset Management will operate as a wholly-owned operating subsidiary of Knight Capital Group.