Federated Investors Inc., a Pittsburgh investment manager, has agreed to buy Clover Capital Management Inc., a Rochester, N.Y., firm that specializes in value investing.
Clover Capital manages $2.8 billion of assets for retail, institutional, and private-wealth investors.
Federated said that it would make an initial payment of about $36 million and a series of growth-based contingent payments that could add as much as $21 million more to the price over the next five years.
Clover says it uses both fundamental research skills and quantitative analytic technology to control the aggregate risk in the portfolios it manages. Federated plans to introduce three traditional value-oriented equity mutual funds, which would be managed by Clover's team.
The large-cap, midcap, and small-cap value funds would use the value-investing strategies employed by Clover Capital since it began in 1984.
Clover would retain its management team and its headquarters in Rochester.
The deal, announced Monday, is expected to close next quarter. It has been approved by Federated's board and by shareholders who own a majority interest in Clover. It remains subject to customary closing conditions, Federated said.
Federated had $333.5 billion of assets under management as of June 30.