LONDON (Reuters) - Hedge fund firm Cheyne Capital Management is to buy fund of hedge funds manager Altedge Capital, the firms said on Tuesday, as the once-booming industry consolidates in the face of client outflows.
Under the deal, Altedge Chief Executive and Chief Investment Officer Chris Goekjian will become partner and chief investment officer at Cheyne, which manages more than $6 billion (4 billion pounds) in assets, and will report to Chief Executive Jonathan Lourie.
Altedge, whose business will be integrated into Cheyne’s over the next six months, hopes to benefit from Cheyne’s distribution.
“From Altedge’s point of view it’s an alliance with a larger platform,” Altedge fund manager and co-founder Cem Habib told Reuters.
“We now have access to Cheyne’s resources such as a strong distribution platform and client base. When the opportunities start to re-emerge we will be in a position to fully participate.”
The deal comes as the $1.4 trillion hedge fund industry faces its biggest-ever challenge in the form of a record poor performance last year and client outflows, although many funds have placed limits or gates on withdrawals.
“Our asset base has been diminished like the rest of the market, but our products are still very strong — a number of our funds had zero liquidity problems or gates,” said Habib.
Cheyne manages hedge funds in areas such as corporate credit, event-driven, asset-backed and equity.
Editing by David Holmes