Virtus Investment Partners has inked a definitive agreement to purchase Westchester Capital Management for an undisclosed sum.
Westchester Capital manages $4.3bn in client assets, including $3.6bn in The Merger Fund.
The deal will enable Virtus to strengthen its offerings of alternative investment strategies with the addition of Westchester Capital’s differentiated, non-correlated strategies. These strategies invest in publicly announced events such as mergers, acquisitions, takeovers, spin-offs and other corporate reorganisations.
Virtus president and CEO George Aylward said: “This agreement gives us the opportunity to partner with a well-respected team and make their strategies available to a greater number of clients through our broad distribution platform.
“We are particularly pleased that The Merger Fund, which is a leader in non-correlated strategies as the first mutual fund devoted exclusively to merger arbitrage, will become one of the many distinctive funds we offer to the retail market.”
As part of the deal, Westchester Capital managing partners and portfolio managers Roy Behren and Michael Shannon have struck long-term employment agreements with Virtus.
They will also reinvest a significant portion of the deal proceeds into the firm’s investment strategies.
Behren and Shannon said that affiliating with Virtus will enable Westchester Capital to further invest in its growth while retaining autonomy over its investment process.
They added: “Becoming an affiliate of Virtus will be a seamless and smooth transition, giving us access to Virtus’ scale, resources and efficiencies. This will immediately benefit investors in our strategies as well as our company as the industry continues to evolve.
“Virtus’ multi-boutique model is the perfect environment to allow our portfolio team to focus exclusively on investment management and also allow our product specialist team to continue providing the information flow and manager access that our investors have enjoyed over the past three decades.”
The deal awaits approvals by each fund’s board and shareholders, with completion expected in the second half of this year.
In February 2018, Virtus agreed to acquire a majority stake in Sustainable Growth Advisers for an undisclosed sum.