The acquisition would expand Virtus’ offerings of alternative investment strategies by adding Westchester Capital’s differentiated, non-correlated strategies that invest in publicly announced events such as mergers, acquisitions, takeovers, spin-offs and other corporate reorganizations.
Under the agreement, Virtus would purchase all of the equity of Westchester Capital. Managing partners and portfolio managers, Roy Behren and Michael Shannon, have entered into long-term employment agreements and are reinvesting a significant portion of the transaction proceeds into the firm’s investment strategies.
“Roy, Michael and their team have built Westchester Capital into the premier provider of event-driven strategies with a long, proven track record of attractive investment performance,” said George R. Aylward, president and chief executive officer of Virtus. “This agreement gives us the opportunity to partner with a well-respected team and make their strategies available to a greater number of clients through our broad distribution platform. We are particularly pleased that The Merger Fund, which is a leader in non-correlated strategies as the first mutual fund devoted exclusively to merger arbitrage, will become one of the many distinctive funds we offer to the retail market.”
Behren and Shannon said that affiliating with Virtus will allow the firm to further invest in its growth while retaining autonomy over its investment process and maintaining its independent team, culture, and brand identity.
“Becoming an affiliate of Virtus will be a seamless and smooth transition, giving us access to Virtus’ scale, resources and efficiencies. This will immediately benefit investors in our strategies as well as our company as the industry continues to evolve. Virtus’ multi-boutique model is the perfect environment to allow our portfolio team to focus exclusively on investment management and also allow our product specialist team to continue providing the information flow and manager access that our investors have enjoyed over the past three decades. On behalf of our partners at Lincoln Peak Capital and ourselves, we are gratified to be given the opportunity to collaborate with such an extraordinarily high-quality institution.”
The transaction is expected to close in the second half of the year, subject to customary closing conditions and approvals by each fund’s board and shareholders.
Virtus will discuss the transaction in connection with its quarterly investor conference call scheduled for 10:00 a.m. Eastern, Tuesday, February 2.
UBS acted as financial advisor and Goodwin Procter LLP was the legal advisor to Virtus on the transaction. Piper Sandler & Co. acted as financial advisor and Berkowitz, Trager & Trager, LLC and Morgan, Lewis & Bockius LLP were the legal advisors to Westchester Capital Management and its shareholders.
About Westchester Capital Management
With a history spanning more than three decades, Westchester Capital has endeavored to deliver consistent, absolute returns through the disciplined execution of event-driven alternative investment strategies. Through an array of investment portfolios, including its flagship fund, The Merger Fund, it provides investors with strategies to invest in publicly announced events such as mergers, acquisitions, takeovers, spin-offs, and other corporate reorganizations, with the goal of profiting from the timely completion of these transactions.
About Virtus Investment Partners, Inc.
Virtus Investment Partners is a distinctive partnership of boutique investment managers singularly committed to the long-term success of individual and institutional investors. The company provides investment management products and services through its affiliated managers and select subadvisers, each with a distinct investment style, autonomous investment process, and individual brand. Virtus Investment Partners offers access to a variety of investment styles across multiple disciplines to meet a wide array of investor needs. Its affiliates include Ceredex Value Advisors, Duff & Phelps Investment Management, Kayne Anderson Rudnick Investment Management, Newfleet Asset Management, NFJ Investment Group, Seix Investment Advisors, Silvant Capital Management, and Sustainable Growth Advisers. Additional information is available at virtus.com.
About Lincoln Peak Capital
Lincoln Peak Capital is a private strategic equity partner for boutique asset management firms, providing capital and expertise to help firms realize their long-term potential. Lincoln Peak Capital’s partner firms manage in excess of $90 billion of assets.
An investor should consider the investment objectives, risks, charges, and expenses of the Funds carefully before investing. The current prospectuses contain this and other information about the Funds. To obtain a prospectus, please visit the Documents page of www.mergerfund.com or call (800) 343-8959. Please read the prospectus carefully before investing.
The Merger Fund is distributed by Compass Distributors, LLC, which is not affiliated with the advisor or any of its affiliates.
Mutual fund investing involves risk. Principal loss is possible.