Irvine-based PAAMCO is merging with New York-based KKR Prisma, a hedge fund, to form an investment firm managing or advising roughly $34 billion in assets.
The new company, PAAMCO Prisma Holdings, will operate independently, the companies said in a statement Monday, and form a liquid alternatives investment firm.
“As the alternatives industry continues to evolve, expanding our reach will further enhance our ability to innovate and to provide leading solutions to our clients,” Jane Buchan, co-founder and CEO of PAAMCO, said in a statement.
So-called liquid alternatives, or 40 Act funds, are available through mutual funds, exchange-traded funds and closed-end funds. The name 40 Act funds, or pooled investments, was created by Congress in 1940.
KKR, under the direction of Girish Reddy, co-founder of KKR Prisma, will retain a 39.9 percent stake, with the remaining stake held by the employees of KKR Prisma and PAAMCO, also known as Pacific Alternative Asset Management Co.
PAAMCO, a private investment firm with $24 billion of assets under management or advisement, was founded in 2000. KKR Prisma, with roughly $10 billion of assets under management, constructs and manages customized hedge fund portfolios in the liquid alternatives investment spectrum.
The new business will be led by co-CEOs Buchan and Reddy. The transaction is expected to close in the second quarter of 2017.
“I believe greater scale, flexibility, and additional resources will enhance our ability to generate strong investment performance and to build and service bespoke solutions for our clients,” Reddy said in a statement.
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