Tetragon Financial Group, which is listed on the NYSE Euronext exchange in Amsterdam, said this morning that it had acquired Polygon’s asset management businesses and infrastructure platform.
Polygon’s asset management business is made up of three strands. It runs $450m across three hedge funds: European event-driven, convertibles and mining strategies.
It owns a 13% stake in GreenOak, a $1.9bn real estate manager in which Tetragon owns a 10% stake. Polygon also owns a 25% stake in LCM, a $4.5bn collateralised loan obligation manager.
The plan, following the acquisition, is to simplify the legal structure of the two firms, according to a person familiar with the situation. The source added that the firms have similar strategies of building a multi-strategy asset management platform.
Tetragon hopes to grow in the mould of alternatives specialists Apollo Global Management and the Blackstone Group and ultimately may look to list in the US, the person said.
Polygon set up Tetragon in 2005 to make credit investments, originally under the name Polygon Credit Managment. Tetragon was floated on Euronext Amsterdam in May 2007. Tetragon’s shares were trading at 8.51p, up 2.28%, at 10.14 GMT.
This morning’s statement said that as part of the deal, Tetragon had also acquired Polygon’s interests in LCM Asset Management and GreenOak Real Estate. The entire transaction was done for 11,695,940 Tetragon non-voting shares, the majority of which will vest over between three and five years, the statement said.
Polygon co-founders Reade Griffith and Paddy Dear are both already principals of Tetragon. In January last year another Polygon co-founder, Alexander Jackson, left Tetragon’s board after a disagreement over the company’s investment in GreenOak.
Griffith said in a statement: “This is a continuation of TFG’s strategy to expand its asset management platform and diversify and strengthen its income streams.”
Polygon began life managing a multi-strategy hedge fund, the Polygon Opportunities Fund, and grew to manage $7.5bn. However, after losing almost half its value in 2008, the fund was forced to close, with many investors finding themselves unable to exit the fund.
There is still about $600m in the “recovery” vehicle, which will be returned to investors when the assets are sold, according to a person familiar with the situation. This morning’s statement said that Polygon has about $25m of contracted management fee income due over the next three years associated with the recovery fund, which is included in the transaction.
Following its 2008 problems, Polygon reinvented itself from a multi-strategy fund to a multi-fund boutique.
–Write to harriet.agnew@dowjones.com