Contango MicroCap (CTN) has offloaded its funds management arm Contango Asset Management (CAML) in a $13m management buyout.
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The business will be acquired by CAM SPV, an entity formed by members of CTN’s investment management team including CAML CIO George Boubouras.
The acquisition amount will be paid in two tranches, with an initial payment of $2.6m on 30 June 2016 following which the ownership of the business will be completely handed over to CAM SPV.
The final payment of $10.4m will be made on or before 31 October 2016.
CTN chairman Mark Kerr said: "CTN acquired 100% of CAML in November 2013 to reduce fees and improve corporate governance. That has been achieved and the CAM investment has proven to be a successful one.
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By GlobalData"Following a review of the investment, the company came to the view that the key management team ideally should have direct equity participation in the business. Contango believes that CAM is now well-positioned to grow both its product offerings and highly customised services."
Moreover, CAML will continue to serve as CTN’s investment manager for an initial five-year term with a management fee of 1.25% for the first $200m and 1% after that.
