California asset manager Hennessy Advisors has struck a definitive agreement with Arlington, Va.-based FBR Fund Advisers to acquire the assets of the entire family of ten FBR funds. These portfolios currently have assets exceeding $1.9 billion, which would bring the total assets managed by Hennessy to more than $2.7 billion once the deal is completed.
The deal, which should be finished by the third quarter of this year, is subject to regulatory review and the approval of the trustee boards of both fund groups, as well as the FBR funds' shareholders. Novato, Calif.-based Hennessy is a publicly traded equity asset manager.
The deal will fold several FBR funds, and their shareholders, into Hennessy vehicles. FBR's large-cap fund will merge with the Hennessy Cornerstone Large Growth Fund. FBR's small-cap portfolio will be melded with the Hennessy Cornerstone Growth Fund and the FBR Mid Cap Fund will merge with the Hennessy Focus 30 Fund.
The remaining seven FBR Funds will fall under the purview of Hennessy's investment management arm, but continue to be managed by the same portfolio managers.
Dave Ellison, FBR's president and CIO, and Winsor Aylesworth, an FBR portfolio manager, will join the Hennessy team and continue to oversee the FBR Gas Utility Index Fund, the FBR Small Cap Financial Fund, the FBR Large Cap Financial Fund and the FBR Technology Fund.
The FBR Focus Fund will continue to be managed by David Rainey, Brian McCauley and Ira Rothberg, who will serve as sub-advisors to the fund, with Hennessy Advisors as the investment manager. The FBR Balanced Fund and the FBR Core Bond Fund will retain their current sub-advisory relationships, with Hennessy Advisors as the investment manager. In addition to members of the portfolio management team, members of the current FBR distribution, marketing, trading, compliance and trading departments will also join Hennessy.