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Rating:An Alts Firm Charts Its Own Course Thanks to PE Not Rated 0.0 Email Routing List Email & Route  Print Print
Wednesday, April 3, 2013

An Alts Firm Charts Its Own Course Thanks to PE

Reported by Tommy Fernandez

And another asset manager sets forth on its own.

Alts specialist Altegris [profile] is charting its own course thanks to a deal with two private equity firms, Aquiline Capital Partners and Genstar Capital.

President and chief executive Jon Sundt couldn't be more excited.

"This is a very positive development for Altegris," Sundt told MFWire. "We are co-owners alongside Aquiline and Genstar. We are excited to grow the business."

A week ago, Aquiline and Genstar announced that they had entered into a deal to acquire Genworth Wealth Management from Genworth Financial, for $412.5 million.

The sale includes both of Genworth Wealth Management’s businesses: the investment management and consulting platform Genworth Financial Wealth Management (“GFWM”), and Altegris, which Sundt founded in 2002.

Sundt described the benefits of the deal to Altegris in this way:
We have always had an entrepreneurial culture--focusing on innovative solutions and alternatives. Aquiline and Genstar bring considerable experience in the financial services and asset management business. In addition, the senior management team at Altegris have a significant stake, a significant personal stake in Altegris going forward. They are looking for us to continue to grow and distribute best of breed alt investments in the 40 Act space and in private placement. They will empower us, encourage us and facilitate us as we grow our business.

These are very experienced guys. They have very on point experience in the asset management and financial services industry. They provide guidance, connections, strategic thinking, very broad strategic thinking in the alt space. They have a very long term view. Five-plus years. Which is important to me.

Moreover, Sundt said, the deal "has given us incentives to grow the business." The senior executive team will now be equity owners of the business again. Their equity stakes had been previously sold to Genworth (in 2010).

The deal is expected to be closed by the end of the first half of the year or third quarter. No other details have been disclosed.

Sundt stressed that the deal won't change the firm's investment strategies.
Our research process stays the same. The research team stays in place. Everything about Altegris remains essentially unchanged in terms of the top people. There is no change. No change in the executive team at all.

Moreover, he said, "we have a very good relationship with Genworth Financial. That is going to continue."

"We are investment strategists for Genworth. We will continue to be their investment strategist and will work closely with them," he said.

They recently launched two funds: the Altegris Multi-Strategy Alternative and the Altegris Fixed Income Long Short funds.

Sundt said that the company has a "very robust" product launch schedule for the next 12 months, with three to four funds in the pipeline, and a similar number of private placements.

He added that the company has grown its sales team dramatically, adding six new hires over the past six months with plans to add more this year as assets grow.

Sundt concluded by telling MFWire that the deal gives them a greater degree of freedom, more aligned partners and an ownership stake."

"We are co-investors with them," he said. "We have a common interest. We are not a small piece of a very large company." 

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