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Rating:A Chicago-D.C. Merger Creates a $15B AM Not Rated 0.0 Email Routing List Email & Route  Print Print
Thursday, May 2, 2024

A Chicago-D.C. Merger Creates a $15B AM

Reported by Neil Anderson, Managing Editor

Sibling asset managers in the Mid-Atlantic and Illinois have combined into a firm that has about 75 people on staff, working with about $15 billion in assets. And their parent company has rebranded, too.

Alexander Robert "Alex" Morris
F/m Investments
CEO, Chief Investment Officer
On Tuesday, Alex Morris, CEO and chief investment officer of F/m Investments [profile], and Craig Vanucci, senior managing director of Ziegler Capital Management (dba ZCM), confirmed that Washington, D.C.-based F/m and Chicago-based ZCM have merged into one organization. The combined organization goes by the "F/m Investments" name.

Morris confirms that Diffractive Managers Group, the parent of F/m and ZCM, has transformed into "F/m Managers Group." And the combined F/m Investments' distribution and marketing organization now goes by "F/m Distribution," led by Morris' partner, former F/m Investments CEO Dave Littleton, who also serves as president of F/m Managers Group. Diffractive bought F/m in early 2023. Morris stepped in to start leading ZCM last year, even as Littleton stepped up to lead Diffractive.

"We did this slowly," Morris tells MFWire, noting that ZCM and F/m have been "sharing operations and sales resources" for more than a year, and having joint investment committee meetings for half a year. "We started sharing some investment ideas, some personnel, investment systems ... and now the last stage is fully integrating."

"Obviously we now have a bigger, strong back office that we're consolidating to a single set of systems," Morris says, noting that "the hardest work" went to folks handling "behind-the-scenes stuff" on compliance and legal issues.

"The team here expands, and everyone gets a new colleague," Morris adds. He notes that the merger involves no changes in portfolio management. "Now they're supported by more folks that can back them up, more resources."

While F/m offers ETFs and active mutual funds, ZCM did a lot of institutional SMA business, Morris confirms. The combined firm offers about 45 strategies in total, and Morris notes that about a dozen groups of those strategies (including three varieties of ETFs) are "actively marketed."

"There is a small amount of overlap in the parties and the platforms that we knew, but there was no real overlap in any of the investment content that we have," Morris says, noting that the two firms' fixed income offerings focus on different parts of the fixed income world. "It's a fairly robust platform with very few gaps that we're missing at this point."

"This is one of those chocolate-meets-peanut-butter-and-you-actually-get-a-Reese's-cup moments," Morris adds.

Morris explains the brand consolidation and the choice of variations on the "F/m" name going forward.

"F/m has become a bit of a brand ... It had some momentum behind it, and it seemed to resonate with people," Morris says. "Ziegler has always had a variety of brand names that it's operated. Over time you'll see some of those retired out."

Yet not all of F/m Investments' brands will consolidate. Morris confirms that the Red Granite brand from ZCM will remain, as will ZCM's ZCM Advisory Group brand. The latter, he notes, works heavily with the Ziegler bank, a former parent of ZCM.

Overall, Morris puts the merger and branding updates in the context of F/m "growing quickly" and offering "a simple story" to the marketplace, even as they keep their "smaller boutique mentality of over-service."

"This is an effort to streamline how investors see us and contact us, without being confused ... Let's just do away with the needless complexity of all of it and focus on delivering investment solutions," Morris says. "Clients are happy ... They want the same level of service, but they always like it if you're a little bit bigger!" 

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