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Rating:For 361's First Deal, Florence Buys a Quant Shop Not Rated 0.0 Email Routing List Email & Route  Print Print
Wednesday, October 05, 2016

For 361's First Deal, Florence Buys a Quant Shop

Reported by Neil Anderson, Managing Editor

Tom Florence is about to make 361 Capital's [profile] first ever acquisition. And he's open to doing more.

Thomas Florence
361 Capital LLC
Chief Executive Officer
Florence confirms that Denver-based 361 is buying quantitative equity manager BRC Investment Management (which has a behavioral-finance-driven investing style), which once subadvised a mutual fund for 361. Greenpoint Village, Colorado-based BRC's headquarters is only a mile from 361's headquarters.

The deal is expected to close by October 31, shortly after the planned liquidation date for the BRC Large Cap Focus Equity Fund.

Though pricing and terms of the deal were not disclosed, Florence confirms that it is an equity deal and that the principals of BRC will receive equity in 361 (which is private-equity-backed but majority-owned by 361 employees). John Riddle, managing principal and chief investment officer of BRC, will join 361's board and become co-CIO of 361 alongside current CIO Cliff Stanton.

The eight BRC team members in the Denver area will all join 361 as part of the deal, Florence confirms. 361 already has 26 people, so it will grow to 34 once the deal closes, and it will have over $2 billion in AUM.

BRC was one of the subadvisors on 361's first mutual fund, the 361 Absolute Alpha Fund, which debuted at the end of 2010. That fund was later shut down as 361 shifted towards funds managed in-house or with single subadvisors and away from multi-subadvisor funds.

Florence praises the BRC team as "very seasoned, very experienced," with more than 90 years of combined investment experience. He's already working on a mutual fund version of one of BRC's strategies, and he aims to launch the fund by the end of 2016.

"They've got a small cap product that has an eight-year track record," Florence tells MFWire. "We've already filed for a mutual fund."

"They do have other strategies that definitely could fit into mutual fund form or an SMA or UMA for the advisor world," Florence adds. "Nothing's planned right now."

Florence also sees the deal boosting 361's efforts in another distribution channel.

"They're an institutional business. Their clients are consultants and institutions," Florence says. "We're excited to be able to expand into the institutional market ... From a distribution standpoint it's great!"

Florence says he's open to making more acquisitions, too.

"Our business strategy is to grow organically, but if we opportunistically find situations that make sense from a growth standpoint, we're certainly going to look at them," Florence says.

"We definitely expect to be launching more funds next year," Florence adds. 

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