Northern Trust buys Aurora Investment Management

Northern Trust has reached an agreement to buy Aurora Investment Management, a hedge fund manager based in Chicago and owned by Natixis Global Asset Management. This move will allow Northern Trust to expand the hedge fund investment options it offers its high net worth and institutional investors. No financial deals were given; the transaction is to close by the end of September.

50 South Capital Advisors, Northern Trust’s alternative investments boutique, signed an agreement Tuesday night to acquire hedge funds-of-funds manager Aurora Investment Management.

Aurora will be merged into 50 South Capital when the deal closes July 1, said John O’Connell, a Northern Trust spokesman, in an interview. Combined assets of the firm will be about $9 billion, Mr. O’Connell said.

Aurora managed $5.7 billion as of Jan. 1. The firm was terminated Feb. 26 by the $34.2 billion Illinois Municipal Retirement Fund, Oak Brook, for management of a $488 million hedge fund-of-funds portfolio.

50 South Capital managed about $3.3 billion and advised on $1.4 billion as of Dec. 31 in hedge funds of funds and private equity funds of funds.

Terms of the deal to acquire Aurora from Natixis Global Asset Management are not being disclosed, Mr. O’Connell said.

The decision to find a buyer for Aurora was mutual, based on the conviction of Aurora’s senior managers that scale was needed to best serve investors, said Ted Meyer, a Natixis spokesman, in an interview. Aurora is a wholly owned subsidiary of Natixis.

RBC Capital Markets served as the exclusive financial adviser to Natixis in the transaction.

Both alternative investment managers are headquartered in Chicago, and “most of Aurora’s portfolio management, research, risk management and client service employees” will move across town to 50 South Capital’s headquarters, Mr. O’Connell said.

Aurora has 68 employees, 30 of whom work on dedicated investment research and investment management teams, Aurora’s website showed.

Mr. O’Connell said Aurora executives joining 50 South Capital include Roxanne M. Martino, partner and CEO; Scott C. Schweighauser, partner, president and portfolio manager; Anne Marie Morley, partner and managing director of operations; and Isabelle Perrault, partner, managing director and head of business development.

“We share similar values and closely aligned investment philosophies with 50 South Capital and are thrilled to be joining forces,” Ms. Martino said in a news release from 50 South Capital.

Mr. O’Connell said the two firms’ investment approaches and capabilities are “complementary” and that Aurora will bring new expertise in emerging hedge fund manager programs, co-investments and liquid alternatives to 50 South Capital.

“The addition of new clients and experienced professionals from Aurora strengthens 50 South Capital. … Alternative investments are a strategic priority for Northern Trust, and we feel this combination strengthens our position in this competitive business,” said Stephen N. Potter, president of Northern Trust Asset Management, in the news release.