Assured Guaranty, through its subsidiary Assured Guaranty US Holdings (AGUS), has agreed to acquire BlueMountain Capital Management in a transaction worth around $160m.

The deal is pending regulatory approval.

Sellers include BlueMountain’s majority shareholder Affiliated Managers Group (AMG), who expects the deal to immediately add to its earnings.

Under the agreement, AMG will get $91m in cash upon deal completion at the end of this year.

An alternative asset manager, BlueMountain oversees $19.3bn in assets.

Assured Guaranty president and CEO Dominic Frederico said: “BlueMountain will be our largest and most important investment outside the financial guaranty sector.

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“We expect to allocate a portion of our financial guaranty subsidiaries’ investment portfolios to be managed by our new asset management platform and believe that will drive improvement in our overall investment returns, which should raise the future level of insurance subsidiary permitted dividends.

“The acquisition is consistent with our strategic objective to diversify into fee-based revenue sources, and we expect this platform to be the basis for further development of our presence in the asset management sector.”

Post deal closure, BlueMountain co-founder, CEO and CIO Andrew Feldstein will assume the role of CIO and head of asset management at Assured Guaranty.

Assured Guaranty believes that the acquisition will not affect its financial strength ratings.