Genworth Financial Inc. on Tuesday announced it bought Altegris, a provider of alternative investment products. Genworth says the deal will expand the capabilities of its wealth management platform, Genworth Financial Wealth Management (GFWM).
La Jolla, Calif.-based Altegris provides alternative investment platforms for advisors that access hedge fund managers, managed future funds and other alternative investments. In September, the company launched an actively-managed mutual fund that employs a managed futures strategy.
Altegris is a group of companies that includes an SEC-registered investment advisor, an SEC-registered broker-dealer, and an CFTC-registered commodity pool operator. It has roughly 2 billion in assets under administration, and provides clearing services to accounts totaling $800 million in institutional assets.
Genworth's purchase price for Altegris will be roughly $35 million at closing, plus performance-based payments. The deal is expected to close by year-end. The combined entity will oversee about $23 billion in assets.
Michael Abelson, senior vice president of investment product management at Pleasant Hill, Calif.-based GFWM, says his company has provided alternative-type exposure for its advisor clients through mutual funds and exchange-traded funds. The Altegris deal enables it to offer deeper exposure to the alternative investment landscape.
"We've had a lot of demand from our advisor base for more traditional high-net-worth structured alternative investments like managed futures and certain types of hedge funds," Abelson says. "We thought Altegris was a great way to bring that capability to the platform as a way to help advisors better serve their high-net-worth clients."
In addition to helping GFWM broaden its suite of alternative investment offerings, Altegris will continue distributing alternative investment products to the wider wealth management space.
"They want us to continue being a separate brand in addition to working closely with GFWM to design products for its distribution channel," says Jon Sundt, Altegris' president and CEO. "They have 6,500 advisors that we don't market and distribute to, so this opens up a whole new distribution category for us."
Sundt says he's been approached in the past by private-equity firms, venture capitalists and wealth managers about buying his company. He notes the timing wasn't right because he was still trying to build his business. But when Genworth approached him in this year's first quarter, he says, "their interest in my business started making strategic sense."
"They're a great strategic partner for us," Sundt adds. "I'll still run the show and my executive team and my staff are staying. We're not changing the DNA, culture or people. We'll still do what we've always done, but we'll just be doing it for a bigger company as well."