ALPS, a DST Company that provides products and services to the financial services industry, is to acquire asset manager Red Rocks Capital, a leader in listed private equity and other private asset investments.
The purchase price of up to USD65 million will consist of a combination of up-front cash consideration and performance-related contingent consideration. The transaction will be funded using a combination of cash and short-term borrowings on revolving credit lines.
The closing of the transaction is expected to occur in the second half of 2015.
Red Rocks, founded in 2003 by Adam Goldman and Mark Sunderhuse, is the first and largest domestic money manager to package listed private equity products in a '40-Act structure. The firm manages and advises USD1.8 billion in assetsi through a variety of product structures, including mutual funds, sub-advised relationships, separately managed accounts, and select variable annuity contracts.
"Acquiring a best-in-class manager like Red Rocks Capital gives us a distinct edge in the alternative investments marketplace," says Ned Burke, CEO of ALPS Holdings, Inc. "This transaction represents an important step in our ongoing asset management strategy."
Golden, Colorado-based Red Rocks has been sub-adviser to the ALPS|Red Rocks Listed Private Equity Fund from its inception in 2007. The offering is now one of the largest actively-managed mutual funds in the U.S. that focuses on providing access to listed private equity investments.
"We have come to know the Red Rocks team quite well over the years," says Tom Carter, President of ALPS Advisors, Inc. "Everything in our experience tells us that ALPS and Red Rocks are going to do great things together for the investment community. I'm confident this acquisition will benefit all parties involved over the long term."
Goldman and Sunderhuse, who collectively represent more than 60 years of experience in private equity and public fund management, are expected to continue in their roles as co-managers for the Red Rocks strategy.
"Our goal has always been to provide investors and financial professionals with access to one of the world's most desired asset classes," says Goldman. "As part of ALPS and the DST Enterprise, we'll be in far greater position to expand the breadth and reach of Red Rocks' offerings."
