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Rating:Two Merging Subadvised Fund Shops Hunt For More Deals Not Rated 3.0 Email Routing List Email & Route  Print Print
Monday, May 18, 2015

Two Merging Subadvised Fund Shops Hunt For More Deals

Reported by Neil Anderson, Managing Editor

The leaders of a pair of subadvised mutual fund shops are looking for more acquisitions, even as they prepare to combine their firms into one shop focused on risk management.

Earlier this month Jerry Murphey, president and CEO of FolioMetrix [profile], and John Pileggi, managing partner of American Independence Financial Services [profile], signed a deal to combine their two mutual fund firms. The deal, which will combine Portland, Oregon-based FolioMetrix and New York City-based American Independence under the RiskX Investments brand with Pileggi as CEO and Murphey as president, is slated to close in September. And Murphey and Pileggi want to do more deals. Murphey had already been on the hunt.

"We'll continue to look for ways to grow through future acquisitions," Murphey tells MFWire.

"There becomes room for us to work underneath that [RiskX] brand," Murphey says, noting that the American Independence Funds will still use their own name and the FolioMetrix Funds will use their own Rx Funds brand. "We're always looking ... [for] the right type of partners that can fit into this kind of ecosystem ... It's got to be the right kind of fit."

Pileggi points to Grail Partners, an M&A shop that specializes in the asset management industry, as a key piece of his and Murphey's acquisitiveness going forward. Grail invested in FolioMetrix last year, and it will remain a significant investor in the combined RiskX after the American Independence-FolioMetrix deal closes later this year. Pileggi highlights the importance of both the funding and the investment banking expertise that Grail managing partner Don Putnam and his team offer. Now Pileggi can offer both cash and stock to acquisition targets.

"I've had to pass up on some significant acquisition opportunities since 2006 [when he took American Independence] simply because I didn't have the capital," Pileggi says. "We can be flexible and nimble, if opportunities present themselves, in a way that I couldn't before ... It's one of the beauties of Don Putnam and Grail being involved."

Combined, American Independence and FolioMetrix currently offer 21 mutual funds, have a staff of 32, and work with about $1.1 billion in assets under management. 

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