MutualFundWire.com: A Four-Year-Old Multi-Boutique Will Buy a Three-Year-Old Peer

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Wednesday, December 21, 2022

A Four-Year-Old Multi-Boutique Will Buy a Three-Year-Old Peer

A four-year-old multi-boutique asset manager in Massachusetts is poised to acquire a three-year-old peer in the Mid-Atlantic. The deal would boost the acquirer to nine affiliated boutiques and $23 billion in AUM.

John Hailer
Diffractive Managers Group / 1251 Capital Group
Chairman / President

Yesterday, John Hailer, chairman of Diffractive Managers Group (and president of 1251 Capital Group, Diffractive's parent), and David Littleton, CEO of F/m Acceleration, LLC [profile], revealed that Boston-based Diffractive has agreed to buy Washington, D.C.-based F/m. The deal is expected to close in the first quarter of 2023 (i.e. next quarter), pending the usual consents and conditions. Pricing and terms of the deal have not been publicly disclosed.

After the deal, Littleton is slated to become Diffractive's president, while Alex Morris, president and chief investment officer of F/m, is slated to become chief operating officer of Diffractive while remaining CIO of F/m Investments. Hailer is expected to remain Diffractive's chairman.

F/m, founded in 2019, currently has a team of 30 and $4 billion in AUMA. Its half dozen boutiques include Genoa Asset Management LLC (a fixed income SMA and UMA shop), Integrated Alpha Investments (an active equity quant shop), and North Slope Capital, LLC (a white label advisory firm). And back in the summer, F/m entered the ETF business with its US Benchmark Series of funds (four so far). (Meanwhile, Diffractive, founded in 2018, already owns stakes in a number of boutiques, including Emerald Asset Management, Greenbacker Capital, Gitterman Asset Management, Mar Vista Investment Partners, Wavelength Capital Management, and Ziegler Capital Management.)

"The acquisition of F/m by Diffractive will bring together complementary skill sets and resources allowing us to augment our centralized distribution capabilities with F/m's proven expertise at delivering innovative new product structures and back-office efficiencies while setting up scalable operations," Hailer states.

"By combing the power and resources of Diffractive and F/m, we will give investors the best of both worlds: access to leading boutique managers along with the scale and efficiency of a world-class multi-manager platform," Littleton states.

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