Janus Capital, the fund manager where ‘Bond King’ Bill Gross settled after leaving PIMCO, is buying Kapstream Capital, the Australian active bond fund co-founded by Kumar Palghat and Nick Maroutsos. The relationship with Gross is said to go back a long way when Palghat worked at PIMCO a decade ago and will see Palghat co-manage the global unconstrained fund with Mr Gross.
The deal is said to be for 51% of the business for a $111m upfront cash payment and with an option to buy the balance of 49%. Kapstream is partially owned by its management and Challenger through its Fidante Partners incubator group and is well-regarded for its unconstrained global fixed income portfolio. Janus Capital chief executive Dick Weil said: “This transaction underscores three key commitments at Janus. “First, we want to be the place where great investors come to invest. Kapstream’s Kumar Palghat, Steve Goldman and Nick Maroutsos are simply great people and great investors. Second, we passionately believe that given volatility in global rates, investors need excellent fixed income choices that offer less exposure to interest rate risk. Third, the acquisition of Kapstream furthers our commitment to expand our fixed income capabilities as part of the firm’s intelligent diversification strategy.”
As at 31 May 2015 Kapstream manages $3.7bn in its absolute return fund, $3.6bn in the absolute return income fund and $1.9bn in the sovereign bond and cash portfolio, a total of $9.2bn funds under management.