After months of alluding to a hedge fund acquisition,
Morgan Stanley Investment Management said in an internal memo Thursday that it acquired Oxhead Capital Management, a Boston-based hedge fund with about $100 million in assets under management. Oxhead, which was founded by three professionals formerly at Putnam, is an equity quant strategy fund.
"We believe that adding Oxhead's deep investment experience and compelling strategies to our platform will provide an additional benefit to the firm and our clients, bringing another diversified source of alpha to our portfolios," said MSIM President Owen Thomas and alternative investment head Stu Bohart in the internal memo. "Going forward, we will continue to pursue a wide range of opportunities to bolster our efforts and we are planning for more internal hires, team lift-outs and bolt-on acquisitions."
Terms of the acquisition were not disclosed. A Morgan Stanley spokeswoman declined to comment beyond the memo.
Building up its alternative investment group has been a goal of Morgan Stanley under CEO John Mack. The matter gained urgency earlier this year when the firm lost out to
in a bid to merge their mutual fund operations with bond-fund giant
In hedge funds, Morgan Stanley is trying to make up ground against
, which dominates the business among Wall Street investment banks.
Since February, Morgan Stanley has hired new managers, moved groups within the firm and elected Bohart to run the alternative investments group within MSIM. Bohart is a respected leader within the hedge fund community, and his appointment was a key step in the evolution of the alternative-investment group. His responsibilities include overseeing any acquisitions the firm makes in the alternative-investments group, including the Oxhead purchase.
Morgan Stanley follows some of its competitors in acquiring well-established hedge funds. In September 2004,
J.P. Morgan Chase
bought a $1.3 billion stake in Highbridge Capital Management, a $7 billion New York hedge fund.
has a stake in Ospraie Management, a commodities-focused hedge fund.