Altegris clinches merger with Artivest after failed auction

After failing to find a buyer last year, Altegris is now merging with technology platform provider Artivest.

The combined company, to be called Artivest, will provide an online platform where individuals and institutions can access alternative funds, including private equity and hedge funds.

Artivest will have headquarters in New York and San Diego and will manage more than $3 billion of assets. The deal is expected to close in the middle of the year, an Altegris spokeswoman said.

No money is changing hands, said James Waldinger, who started Artivest in 2012 and is continuing as CEO of the merged company. “We are literally just combining the two businesses,” Waldinger said. “No one is buying or selling anything.”

More than 70 people from Altegris are joining forces with Artivest’s roughly 30-person staff. Much of the company’s AUM is coming from Altegris, which had $2.51 billion under management as of Dec. 31.

No job cuts are expected, Waldinger said. Martin Beaulieu, executive chairman and CEO of Altegris, will be executive chairman of the combined firm.

Matt Osborne, who founded Altegris 15 years ago and works as chief investment officer, will continue as CIO overseeing investment research and management.

The Altegris family of funds will retain their name, a statement said.

The deal is the latest in the trend of asset managers targeting high-net-worth investors.

Pacific Investment Management Co in December turned to Artivest to launch an online platform that would enable small investors to gain access to alternatives, the Wall Street Journal reported in December. Instead of the usual $5 million minimum needed to invest in such funds, clients, through the Artivest platform, may invest as little as $100,000, the story said. Others that have partnered with Artivest include Nuveen, KKR and Snowden Lane Partners.

Altegris also turned to Artivest in August when it wanted to provide online access to alternatives for wealthy individuals, the spokeswoman said. It was here, during the partnership, that Altegris and Artivest recognized synergies between the teams, executives said. “We work really well together,” the Altegris spokeswoman said.

For Altegris, the merger represents the next step for an asset-management firm that was up for sale in late 2016.

Altegris was originally part of Genworth Wealth Management, which Aquiline and Genstar acquired in 2013. Genworth later became known as AssetMark. In 2016, the two PE firms sold AssetMark to Huatai Securities.

Altegris, however, wasn’t part of the deal and the company was on the block into early 2017, a banker said. Aquiline and Genstar were unable to find a buyer for Altegris, sources said. “The deal [with Artivest] makes sense,” one of the sources said.

There are also no changes to both company’s investor bases, Waldinger said. Artivest has raised about $17 million in funding, including a $15 million round in 2015 that was led by KKR. Other investors include RRE Ventures, Thiel Capital and Fintech Collective. Genstar and Aquiline are also staying put, Waldinger said.

“Everyone is sticking along for the ride,” Waldinger said.

Action Item: For further information, call Waldinger at +1 212-951-0027

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