Virtus Investment Partners, Inc., which operates a multi-boutique asset management business, today announced it has entered into an agreement to acquire Stone Harbor Investment Partners LP, a premier manager of emerging markets debt, multi-asset credit, global corporates, and other strategies with $15.4 billion1 of assets under management.
Stone Harbor offers credit strategies primarily to global institutional clients, including sovereign wealth investors, pension plans, foundations, endowments and insurance companies. Its strategies are also available through open- and closed-end mutual funds, including the Stone Harbor Emerging Markets Debt Fund (SHMDX), and to non-U.S. investors through UCITS and QIAIF pooled funds.
The addition of Stone Harbor as an affiliated manager will further enhance and diversify Virtus’ investment capabilities with a highly-regarded emerging markets debt strategy that has a 30-year track record. It would also increase Virtus’ non-U.S. institutional client base, expand global distribution resources, and add a proprietary operating and analytical platform that offers end-to-end investment and risk management technology, including an environmental, social and governance (ESG) framework, which can be leveraged by other affiliates.
“We are pleased to add Stone Harbor as an affiliated manager. Their culture and approach is strongly aligned with our core beliefs of providing high-quality, attractive investment strategies and exceptional service to clients,” said George R. Aylward, president and chief executive officer of Virtus. “Stone Harbor’s institutional-quality emerging market debt capabilities are well-respected among clients and consultants and highly complementary to our other fixed-income capabilities. In addition, their global distribution resources will augment our existing sales capabilities supporting other affiliates.”
As a boutique affiliate, Stone Harbor will maintain autonomy over its investment processes, brand and culture, ensuring continuity for its clients, consultants, and distribution partners, who will collaborate with the same investment teams. The transaction gives Stone Harbor greater flexibility to concentrate on the investment needs of clients while benefiting from the expanded resources that are available as part of a larger company, including access to Virtus’ shared services, strong distribution capabilities and additional analytical resources.
Peter Wilby, Managing Partner and co-Chief Investment Officer, Jim Craige, co-CIO and Head of Emerging Markets, Dave Torchia, Head of Multi-Asset Credit, and several other key individuals have entered into long-term employment agreements, ensuring continuity of the firm’s investment process.
“We view this as an incredibly positive event for our clients, business partners, and our investment teams. It was essential for us to find a partner that shares our commitment to fostering an environment that allows us to continue to deliver superior results for our clients, and Virtus shares our strong focus on investment performance and client service,” Wilby said. “As an affiliate of Virtus, our clients are assured of a seamless experience given our similar cultures and approaches. In addition, as part of a larger company, we can augment our fixed income solutions for new and existing clients.”
Virtus will acquire 100% of Stone Harbor. The terms of the transaction were not disclosed, but it is expected to be funded with existing financial resources and to be modestly accretive to earnings per share, as adjusted, upon closing. The transaction is expected to close by the end of the year, subject to customary closing conditions and approvals by the Stone Harbor Funds board and fund shareholders.
Broadhaven Capital Partners acted as financial advisor and Goodwin Procter LLP was the legal advisor to Virtus on the transaction. RBC Capital Markets, LLC acted as financial advisor and Morgan Lewis & Bockius LLP was the legal advisor to Stone Harbor.
About Stone Harbor
Stone Harbor Investment Partners LP is a global institutional fixed-income investment manager specializing in credit and asset allocation strategies. The firm manages institutional clients’ assets in a range of investment strategies including emerging markets debt, global high yield, bank loans, as well as multi-sector credit products including unconstrained and total return approaches. The firm’s investment strategies are based on fundamental insights, derived from a combination of proprietary research and the in-depth knowledge and specialized experience of the firm’s team. Founded in 2006, it is based in New York City with additional offices in London and Singapore.
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.