Here is another in our continuing series of articles about things going on around Rochester. Enjoy!
Rochester, NY, investment firm Manning & Napier is expecting to acquire Chicago-based 2100 Xenon Group LLC by the end of June, according to the firm’s management. The acquisition will create alternatives for investors who are threatened by rising interest rates and introduce new products to Manning & Napier’s client base.
Like Manning & Napier, 2100 Xenon specializes in financial planning for individual and institutional clients, but unlike Manning & Napier, they also have an emphasis on managed futures. This is one of the main reasons Manning & Napier expressed interest in acquiring 2100 Xenon, according to CEO Patrick Cunningham, as it will allow the firm to enter certain markets for the first time.
Managed futures perform differently than other asset classes, such as stocks and bonds. This asset class uses proprietary trading or discretionary methods in the short-term or long-term for an investor, and it can provide protection when interest rates go up.
Individual and corporate money managing clients control their assets through investments, such as stocks, bonds, and mutual funds, the latter of which can be traded or redeemed at any time in case of a financial emergency. With the acquisition of 2100 Xenon, Manning & Napier can provide an alternative financial strategy for their clients, too.
Alternative strategies are a growing segment in the financial planning world, and the phrase isn’t so much an official term as it is a way to describe any investments outside a typical portfolio. Managed futures are but one way investors are trying to create passive income and greater diversification.
While managed futures and other alternatives are beneficial from the investor’s perspective, they are also good business for a financial planner, too. The fees for this management tend to be higher because they are typically incentives based on performance rather than flat fees.
Cunningham has named Jay Feuerstein, founder, CEO and chief investment officer of 2100 Xenon, as managing director of alternative strategies for Manning & Napier. Although the Chicago company is undergoing an acquisition from a Rochester firm, all 11 employees of 2100 Xenon will remain in Chicago and operate independently, according to Cunningham.
Manning & Napier manages $12 billion in defined contribution assets and $24 billion in multi-asset-class portfolios in a mix of mutual funds, separately managed accounts, and collective investment trust funds. With the acquisition, Manning & Napier will be able to incorporate some aspects of 2100 Xenon’s core programs into their services, as well.