Knight Capital Group has agreed to acquire Illinois-based Astor Asset Management, a money management firm specializing in macro-economic strategy and exchange-traded fund (ETF) portfolio construction, for approximately $20m in cash and stock.
Astor Asset Management was founded by managing partner Robert Stein in 2001, and seeks to identify fundamental economic shifts in order to provide retail and institutional investors with capital appreciation while managing risk in diverse market conditions.
Astor utilizes macro-economic models to construct portfolios of ETFs which are offered through advisors within separately-managed accounts (SMAs) and the Astor long/short ETF mutual fund. Astor has 13 employees and approximately $560m in assets under management.
According to the Knight Capital, the terms of the agreement include a four-year employment contract for Mr Stein.
Upon the close of the acquisition, Astor Asset Management, will operate as a wholly-owned operating subsidiary of Knight Capital Group.
Thomas Joyce, chairman and CEO of Knight Capital Group, said: “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. 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.”
Mr Stein said: “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.”