Virtus Investment Partners Closes on Acquisition of AlphaSimplex

Rhea-AI Summary

Virtus Investment Partners (NASDAQ: VRTS) has successfully completed its acquisition of AlphaSimplex, a leader in quantitative alternative investment strategies, as of April 1, 2023. This strategic acquisition allows Virtus to diversify its alternative investment offerings further, adding AlphaSimplex's systematic strategies, which currently manage $8.3 billion in assets. The firms' combined expertise aims to enhance investment returns even during volatile markets. Noteworthy offerings include the 5-Star Morningstar Rated AlphaSimplex Managed Futures Strategy Fund (ASFYX), which holds $2.7 billion in assets, expected to transition by May 2023.

Positive

• Acquisition enhances Virtus's alternative investment offerings.
• AlphaSimplex brings $8.3 billion in assets under management.
• Expected to leverage strong investment strategies during market volatility.

Negative

• Integration challenges may arise from the acquisition.

Leading manager of quantitative alternative strategies

HARTFORD, Conn.--(BUSINESS WIRE)-- Virtus Investment Partners, Inc. (NASDAQ: VRTS), which operates a multi-boutique asset management business, completed its previously announced acquisition of AlphaSimplex, LLC, a leading manager of quantitative alternative investment solutions with $8.3 billion¹ of assets under management.

The transaction, which closed on April 1, further diversifies Virtus’ alternative investment offerings by adding AlphaSimplex’s systematic, quantitative investment solutions that are available to institutional and individual clients. The firm’s distinctive offerings are designed to adapt to changing market dynamics and provide the potential for positive, uncorrelated investment returns even through the markets’ most challenging periods.

AlphaSimplex offers its highly regarded trend-following managed futures strategy through the $2.7 billion, 5-Star Morningstar Rated™² AlphaSimplex Managed Futures Strategy Fund (ASFYX), which is the third-largest U.S. mutual fund in its category, and also manages the AlphaSimplex Global Alternatives Fund (GAFYX). Virtus expects to complete the adoption of these funds in May and the transition of the Luxembourg-domiciled UCITS fund managed by AlphaSimplex, subject to regulatory approval, is expected in the third quarter of 2023. Natixis Investment Managers will continue to distribute the funds until the transitions are complete.

As a boutique affiliate of Virtus, AlphaSimplex will maintain autonomy over its investment processes, brand, and culture, ensuring continuity for its clients, consultants, and distribution partners.

“AlphaSimplex offers innovative capabilities that rely on researching and analyzing market behaviors and employing a proprietary risk management process to help investors succeed in ever-evolving markets,” said George R. Aylward, president and chief executive officer of Virtus. “We are pleased to have the well-respected team at AlphaSimplex join us as an affiliated manager and look forward to supporting their continued growth.”

About AlphaSimplex

AlphaSimplex is a registered investment adviser that seeks to expand the way the world invests with the power of diversification. The firm specializes in researching and analyzing markets and behaviors, including volatility and risk. AlphaSimplex develops systematic investment strategies that are designed to adapt to changing market dynamics, using primarily liquid futures and forward contracts. The firm seeks to deliver investment success and positively impact clients and colleagues by embracing a thoughtful culture of innovation, collaboration, and excellence.

About Virtus Investment Partners, Inc.

Virtus Investment Partners (NASDAQ: VRTS) is a distinctive partnership of boutique investment managers singularly committed to the long-term success of individual and institutional investors. We provide investment management products and services from our affiliated managers, each with a distinct investment style and autonomous investment process, as well as select subadvisers. Investment solutions are available across multiple disciplines and product types to meet a wide array of investor needs. Additional information about our firm, investment partners, and strategies is available at virtus.com.

Before investing, consider the fund’s investment objectives, risks, charges, and expenses. Visit im.natixis.com or call 800-225-5478 for a prospectus or a summary prospectus containing this and other information. Read it carefully.

Mutual fund investing involves risk. Principal loss is possible. Futures and forward contracts can involve a high degree of risk and may result in potentially unlimited losses. Because they depend on the performance of an underlying asset, they can be highly volatile and are subject to market, credit, and counterparty risks.

Morningstar Information (As of December 31, 2022)

AlphaSimplex Managed Futures Strategy Fund (Class Y: ASFYX)

Morningstar Category: Systematic Trend
Overall rating derived from weighted average of the 3-, 5-, and 10-year (if applicable) Morningstar Rating metrics; other ratings based on risk-adjusted returns.
Overall out of 68 funds	★★★★★
Three years out of 68 funds	★★★★★
Five years out of 62 funds	★★★★
Ten years out of 33 funds	★★★★★

For each fund with at least a three-year history, Morningstar calculates a Morningstar Rating™ used to rank the fund against other funds in the same category. It is calculated based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a fund's monthly excess performance, without any adjustments for loads (frontend, deferred, or redemption fees), placing more emphasis on downward variations and rewarding consistent performance. Exchange-traded funds and open-ended mutual funds are considered a single population for comparative purposes. The top 10% of funds in each category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars and the bottom 10% receive 1 star (each share class is counted as a fraction of one fund within this scale and rated separately, which may cause slight variations in the distribution percentages). Past performance is no guarantee of future results.

^©2023 Morningstar, Inc. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete, or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information.

The AlphaSimplex Managed Futures Strategy Fund and AlphaSimplex Global Alternatives Fund are distributed in the U.S. by Natixis Distribution, LLC, a limited purpose broker-dealer and the distributor of various registered investment companies for which advisory services are provided by affiliates of Natixis Investment Managers. Natixis Distribution, LLC is located at 888 Boylston Street, Suite 800, Boston, MA 02199-8197. Member FINRA, SIPC. 800-225-5478 im.natixis.com.

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¹ As of February 28, 2023. Assets under management (AUM) includes the trading size (capital) of separately managed accounts managed by AlphaSimplex (other than overlay accounts) for which the client has elected to fund the capital of the strategy on a partial basis. This measure of AUM does not correspond to regulatory AUM.
² Overall rating derived from weighted average of the 3-, 5- and 10-year (if applicable) Morningstar Rating metrics; other ratings based on risk-adjusted returns.

View source version on businesswire.com: https://www.businesswire.com/news/home/20230403005226/en/

Sean Rourke

Investor Relations

Virtus Investment Partners

(860) 263-4709

sean.rourke@virtus.com

Joe Fazzino

Media Relations

Virtus Investment Partners

(860) 263-4725

joe.fazzino@virtus.com

Jaime Doyle

Media Relations

JConnelly

(973) 944-8105

jdoyle@jconnelly.com

Source: Virtus Investment Partners, Inc.

FAQ

What was the purpose of Virtus Investment Partners acquiring AlphaSimplex?

The acquisition aimed to diversify Virtus's alternative investment offerings and leverage AlphaSimplex's quantitative investment strategies.

When did Virtus complete the acquisition of AlphaSimplex?

Virtus completed the acquisition of AlphaSimplex on April 1, 2023.

What assets does AlphaSimplex manage?

AlphaSimplex manages approximately $8.3 billion in assets.

What is the expected impact of this acquisition on Virtus's stock?

The acquisition is expected to enhance investment strategies and potentially improve returns, benefiting Virtus's stock performance.

When will the transition of AlphaSimplex funds be completed?

The adoption of AlphaSimplex funds is expected to be completed in May 2023, with a transition plan for Luxembourg-domiciled UCITS funds anticipated in Q3 2023.