A Gotham fund firm will soon buy an institutional growth equity asset manager near Boston.

Daniel "Dan" Cayley Chung Fred Alger Management CEO, CIO

On Thursday, Dan Chung, CEO and chief investment officer of Alger Group Holdings, LLC [profile], and Christoph Hofmann, president and chief distribution officer of Fred Alger & Company, LLC, confirmed that New York City-based Alger has agreed to acquire Newton, Massachusetts-based Redwood Investments, LLC. Redwood will become subadvisor to three Alger funds: the Alger Emerging Markets Fund, the Alger Global Focus Fund, and the Alger International Focus Fund. (Redwood does not currently offer its own mutual funds.)

Third Street Partners advised Alger on the deal, which is expected to close by January 31. Pricing and terms of the deal have not been publicly disclosed.

Redwood is led by Jennifer Silver and Michael Mufson, managing partners and co-chief investment officers. They co-founded the firm in 2004, and it now has more than $1.6 billion in AUM.

The current principal owners of Redwood, according to its form ADV filed last week, are Silver (who owns between 50 percent and 74 percent) and Mufson (who owns between 25 and 49 percent); the Alger team notes that both Alger and Redwood are majority-owned by women. The form also reveals that Alger already bought a six-percent stake in Redwood on December 21. (That stake was previously owned by Estancia Capital Partners, LP.) Redwood has 12 employees (not counting clerical staff), according to the filing.

Once the Alger deal closes, Redwood will become a wholly-owned Alger subsidiary "and will leverage Alger's Operations and Distribution functions," a spokesperson for Alger confirms.

"Redwood will remain an independent entity with 7 employees, including ... Jennifer Silver and Michael Mufson, as well as their investment personnel," a spokesperson for Alger tells MFWire. "Alger has 166 employees and Weatherbie, another wholly owned subsidiary of Alger, has 7 employees."

Chung lauds Redwood as "a boutique investment specialist that has an outstanding track record and team, shared alignment with clients, and global perspectives."

"Redwood's cross-portfolio insights and qualitative and quantitative approach to analyzing growth equity companies will complement our investment process across our existing portfolios," Chung states.

Hofmann puts the Redwood deal in the context of Alger's continuing international expansion, as the team builds out a London office and a Singapore sales presence.

"The combination with Redwood will offer deep investment expertise, especially Redwood's non-U.S. investment capabilities to our clients in the U.S. and across Europe and Asia," Hofmann states.

Mufson lauds Alger as "a recognized leader in growth equity for 60 years." (Alger first launched in 1964.)

"Our firm will greatly benefit from the significant distribution channels that Alger has built while enabling the investment team to stay focused on clients' portfolios," Silver states. 

Stay ahead of the news ... Sign up for our email alerts now
CLICK HERE