A multiboutique asset manager outside Philadelphia is betting
on a 14-year-old, minority-owned asset management boutique outside the Big Apple. Watch for the Philly firm (which is backed by a family office
) to help boost the boutique's distribution, in part through packaged asset management products.
| Darshan Niranjan Bhatt|
Glovista Investments, LLC
Co-Founder, Deputy Chief Investment Officer
On Monday, Andrew Smith
, chief executive of Spouting Rock Asset Management, LLC
], and Darshan Bhatt
, deputy chief investment officer officer of Glovista Investments, LLC
that Bryn Mawr, Pennsylvania-based Spouting Rock AM recently bought a minority stake in Jersey City, New Jersey-based Glovista. (Glovista also has offices in Miami, Florida and San Mateo, California.) The deal closed late last month, Bhatt confirms.
Glovista had $568 million in AUM as of June 30, Bhatt tells MFWire
, and the boutique has a team of ten people. Spouting Rock AM now works with $3.7 billion in assets, Smith tells MFWire
Bhatt and Smith declined to comment on the pricing and terms of the deal. Yet Bhatt confirms that he and Carlos Asilis
, Glovista's chief investment officer, still together own the majority of the boutique. And Smith noted that Spouting Rock AM buys stakes that vary in size from 30 to 70 percent, with the 40 percent to 60 percent range being the firm's sweet spot.
The Glovista team specializes in applying "global macro processes to manage differentiated strategies for clients." Their two main strategies are an emerging markets long-only equity strategy (where the PMs start by focusing on "country, currency, and sector selection" before they start evaluating and picking specific stocks, Bhatt says) and a go-anywhere multi-asset strategy (designed for "generating predictable returns for clients while limiting major drawdowns," Bhatt says.
Glovista's client base is split roughly fifty-fifty between institutions (mostly pensions) on the one hand and private banking platforms and family offices on the other hand, Bhatt confirms. They mainly offer SMAs, but watch for them to work on pooled funds, too. (Perhaps mutual funds or ETFs will come down the line.)
"Our fund structure primarily has been separately managed accounts," Bhatt says. "One of the reasons for us to look at this partnership is that it allows us to launch various fund structures."
Distribution in general, Bhatt says, is a key factor in the Glovista-Spouting Rock AM deal. He notes that Glovista had a single distribution team member before the deal.
"We basically wanted more resources on our marketing and distribution side ... This partnership with Spouting Rock allows us to expand those capabilities," Bhatt says. "It also allows us to access those distribution agreements that they have."
Another factor that helped, Bhatt notes, is that Smith and other key Spouting Rock AM team members have experience in the emerging market asset management space. (Smith previously co-led
a big multinational EM asset manager's U.S. business before joining
the brand new Spouting Rock AM three years ago.)
"I've always believed in emerging markets personally," Smith says. "I've always wanted to have a manager in this space. In the long run ... I do think it will continue to outperform."
"Glovista kind of ties in exactly to what we are looking for: managers who are in niche areas," Smith adds. "The more niche it becomes, the less-fee-constrained. And we're only looking for pure active managers."
Asilis and Bhatt co-founded Glovista in 2007 after working together at Proxima Alfa Investments and J.P. Morgan.
Stay ahead of the news ... Sign up for our email alerts now