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Rating:A California Fund Firm Does its Fourth Deal in 13 Months Not Rated 5.0 Email Routing List Email & Route  Print Print
Tuesday, August 11, 2009

A California Fund Firm Does its Fourth Deal in 13 Months

Reported by Armie Margaret Lee

Forward Management [see profile] has taken a minority stake in Broadmark Asset Management, a New York City-based firm that manages traditional equity long/short, ETF, dedicated short and futures strategies. This marks Forward's fourth deal in 13 months.

The transaction closed last month, said Forward CEO Alan Reid in an interview with The MutualFundWire. He declined to comment on the size of Forward's stake.

Last month, Forward filed papers with the SEC to roll out a mutual fund, Forward Tactical Growth Fund, which will be sub-advised by Broadmark.

"We're focused on building our lineup of alternative options," Reid said. Forward currently offers six such products.

Forward and Broadmark have also recently partnered to offer SMAs based on the Broadmark Long Short Strategy.

The purchase of the minority stake is the latest in a string of recent transactions Forward has done. In June of last year, Forward sealed deals to purchase Accessor Capital Management and on the SMA side, the retail division of Berkeley Capital Management. Then in February of this year, Forward inked an agreement to acquire Kensington Funds.

Forward, based out of San Francisco, was founded in 1998 with the backing of Gordon Getty, an heir to the Getty oil fortune.
Company Press Release

SAN FRANCISCO--(BUSINESS WIRE)--Forward Management, LLC (Forward) today announced that it has taken a minority ownership position in Broadmark Asset Management (Broadmark). Forward plans to launch a mutual fund, Forward Tactical Growth Fund, which will be sub-advised by the investment team at Broadmark. Forward and Broadmark recently partnered to offer separately managed accounts based on the Broadmark Long Short Strategy LP.

Broadmark is an investment advisor focused on outperforming the equity markets. They believe that portfolio risk and return can be enhanced with a strategy that is not required to be long only and fully invested, and that stock market risk can be addressed. They use a multi-factor process which seeks to identify market opportunities over time. Their investment management approach is research-driven, and employs a qualitative top-down analysis combined with quantitative risk management.

"Broadmark's strength in up and down markets will give our clients unique access to a management style that seeks to maximize market opportunities and minimize market risk," said J. Alan Reid, CEO of Forward Management.

Forward Tactical Growth Fund's investment objective is to produce above-average, risk-adjusted returns, in any market environment, while exhibiting less downside volatility than the market itself. In attempting to achieve this objective, the fund will be able to invest in both U.S. and non-U.S. securities, including exchange traded funds (ETFs), equities, fixed income and derivatives. The fund’s strategy includes evaluating individual securities, sectors and entire markets to determine if they are over or undervalued, and accordingly to take both long or short positions as a result of their analysis. The fund will accomplish this by primarily investing through ETFs.

"We are seeing advisors modifying their traditional manager allocation and rebalancing approach. When correlations all went to '1,' that approach did little to manage risk. As a result, many are making an additional allocation to products that manage risk and enhance alpha by having the flexibility to be long, short or neutral on the market," added Jeff Cusack, President of Forward Management.

The equity investment in Broadmark is the fourth investment or acquisition Forward has completed in the last 11 months. In early June, Forward completed its acquisition of Kensington Funds adding almost $900 million to Forward’s assets under management. Forward acquired the assets of Accessor Capital Management LP, investment advisor to the Accessor Funds in 2008, as well as the assets of Berkeley Capital Management, LLC including the investment portfolios and team responsible for managing the Global Dividend, International Dividend, U.S. Dividend and SmallMid Core Portfolios.

"We are excited to partner with Forward to expand access to our investment strategies that have been traditionally limited to hedge funds and now will be made available via mutual funds and separately managed accounts," said Chris Guptill, CEO and CIO of Broadmark Asset Management.

About Forward Management, LLC

Forward Management, LLC, based in San Francisco, is the investment advisor to the Forward Funds and the Accessor Funds. The firm also markets a range of separately managed accounts. Forward Management offers institutional money managers, financial advisors and individual investors access to industry leading investment managers, investment products and services. The firm specializes in identifying sub-advisors who have long track records of managing assets in specific investment disciplines and asset classes. More information on Forward Management and the Forward Funds can be found at www.forwardmgmt.com.

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