(Adds dropped word in para 2)
* Pine Grove manages portfolios with $1 bln in assets
* Credit-focused fund of hedge funds to add to FRM unit
* Two-thirds of assets from institutional investors
By Simon Jessop
LONDON, June 9 British hedge fund manager Man
Group said on Monday it is buying credit-focused
privately held fund of hedge fund firm Pine Grove Asset
Management, stepping up a push into the United States.
Pine Grove has around $1 billion in assets - less than 2
percent of Man Group's $55 billion - but the deal is being
interpreted by analysts as evidence of a wish by Man Group to
expand in the United States by acquisition rather than gradual
Monday's announcement follows news in May that Man Group was
in talks to buy another U.S. fund, Boston-based Numeric
"It appears, with today's announcement of a U.S.-based asset
manager and ongoing discussions with another U.S.-based asset
manager, that's Man's strategy to penetrate the U.S. is more
focused on acquisitions to gain entrance opposed to an organic
approach," said RBC Capital Markets' Peter Lenardos.
"This is likely to yield a more immediate return."
Man Group shares were trading more than 1 percent higher
following the announcement, outperforming Britain's FTSE 100
index which was up 0.3 percent.
Financial terms of the Pine Grove deal, which is expected to
close in the third quarter, were not disclosed.
Founded in 1994, two-thirds of Pine Grove's assets are from
primarily U.S. institutional investors, with the rest from U.S.
high net worth individuals and family offices.
"Pine Grove has a long and accomplished track record of
outperformance and is an excellent addition to the FRM (Man's
fund of funds) business," said Luke Ellis, president of Man
Group in a statement.
After the deal completes, Pine Grove President Matthew
Stadtmauer will become FRM president, while Tom Williams, Pine
Grove's chief investment officer, will continue to be
responsible for all investment decisions relating to Pine
Grove's portfolios and will join FRM's Investment Executive
"We are now at the point in our evolution where the
additional infrastructure, resources and support available at
FRM will provide significant benefits to existing and future
clients," Matthew Stadtmauer said in the statement.
(Additional reporting by Chris Vellacott Editing by Jeremy