BOSTON (Reuters) - Northern Trust Corporation (NTRS.O) is beefing up its alternative assets business by buying hedge fund of funds manager Aurora Investment Management, the trust bank said.
The deal will unite Chicago based Aurora, which had been owned by Natixis Global Asset Management (CNAT.PA) and oversees roughly $5.7 billion, with its cross-town neighbor, Northern Trust’s 50 South Capital Advisors unit. Together they will oversee $9 billion in assets when the deal closes in July. No details were given on the financial terms.
Aurora becomes the latest hedge fund group to find a new parent in the fast changing $3 trillion industry which has been marked by years of lackluster returns coupled with clients’ complaints about hedge funds’ high fees.
At the same time hedge funds remain an important piece of business for many banks especially as investors are clamoring for alternatives to plain stock and bond funds and many banks and investment advisors are rolling out hedge funds that are more tailored to retail clients.
“Alternative investments are a strategic priority for Northern Trust, and we feel this combination strengthens our position in this competitive business,” said Stephen Potter, president of Northern Trust Asset Management, in a statement.
Aurora’s chief executive Roxanne Martino and its president, Scott Schweighauser, are expected to move to the Northern Trust unit.
Reporting by Svea Herbst-Bayliss; Editing by Chris Reese