Strategic Combination Creates Strong Investment Management Boutique With Specialization and Scale Across U.S. Equity, Multi-Asset, Real Assets and Alternatives
Westwood Holdings Group, Inc., a Dallas-based investment management boutique and wealth management firm, has entered into a definitive agreement with Salient Partners, L.P. (“Salient”), a Houston-based investment firm, and its related entities, pursuant to which Westwood will acquire Salient’s asset management business.
Salient is a real asset and alternative investment firm that offers a suite of strategies focused on energy and infrastructure, real estate and tactical alternative investments. The firm has $4.5 billion in assets under management (“AUM”).
This strategic acquisition will increase Westwood’s total AUM by 32% to $18.4 billion, providing pro forma specialization and scale across the combined company’s Multi-Asset, Real Assets and Alternative Strategies.
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Westwood is acquiring Salient’s four distinct investment capabilities, all of which bolster Westwood’s growing Multi-Asset, Real Assets and Alternatives platform:
Energy Infrastructure – A recognized leader and innovator in the MLP and Energy Infrastructure space, Salient’s Energy Infrastructure team has worked together for over a decade and is highly regarded for its intellectual capital and thought leadership. Salient’s Energy Infrastructure strategies total $2.5 billion in AUM and are available in the form of separately managed accounts, open-end mutual funds, a closed-end fund and private funds.
Tactical Equity – With $1.4 billion in AUM, Salient’s Liquid Alternatives strategies are highly scalable. Sub-advised by Broadmark Asset Management LLC (“Broadmark”), the Tactical Equity strategies are offered in the form of mutual funds and separately managed accounts. Broadmark has compiled an exceptional 23-year track record successfully mitigating volatility, while seeking to produce above-average, risk-adjusted returns in all market environments with less downside volatility than the S&P 500 Index. Through this transaction, Westwood will also acquire a substantial minority ownership stake in Broadmark.
Real Estate – Salient’s Real Estate team has a respected legacy that stretches over two decades of offering differentiated approaches to investing in liquid real estate securities that are designed to deliver attractive current yield and appropriate risk-adjusted total returns. Salient’s Real Estate strategies total $306 million in AUM and are available in the form of mutual funds and separately managed accounts.
Private Investments – Salient also has substantial experience sourcing and raising assets for private investment vehicles across energy and real asset strategies. Current AUM in private investments totals $286 million.
The investment and distribution capabilities of Westwood and Salient are highly complementary and are expected to enhance the combined organization’s ability to provide attractive investment outcomes for a wide range of institutional, intermediary and wealth management clients. Salient brings strong product advocacy within top-tier intermediary platforms and access to several thousand individual financial advisor relationships. The opportunities provided by increased scale and product availability are expected to be quickly leveraged by an expanded distribution team to benefit our clients and investment teams.
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“These additional investment strategies are designed to provide solutions that we believe investors are increasingly seeking, including alternative sources of income, real assets with inflation protection, low correlation to traditional asset classes and volatility mitigation. Incorporating these strategies will allow us to capitalize on the substantial investments we have made in our distribution platform over the last several years and will position us to serve a broad range of client needs and accelerate the growth of our business,” said Brian O. Casey, President and Chief Executive Officer of Westwood. “This transaction provides a genuine cultural fit, aligns with our strategic objectives and strengthens our business moving forward. The many opportunities for product extensions across the combined range of investment capabilities, including multi-asset, real assets and alternative strategies, have energized our teams.”
“As a Texas-based investment manager, we are very familiar with Westwood and their outstanding reputation as an innovative investment and wealth management firm. Westwood offers the ideal fit for us to continue our mission of providing clients with superior risk-adjusted returns and attentive service. Westwood’s strong institutional relationships and robust distribution infrastructure will enable us to capitalize on the demand for energy infrastructure and real estate investments. Salient’s inherent strengths as an alternative and real-asset investment manager will be amplified and enhanced through our combination with Westwood’s existing Multi-Asset and U.S. Value Equity platform,” said Gregory A. Reid, President and Energy Infrastructure Portfolio Manager at Salient.
“The Broadmark team is extremely excited to be affiliated with Westwood. Brian Casey and his team have built a terrific organization that will greatly support and enhance our investment capabilities. We look forward to collaborating with Adrian Helfert, Westwood’s CIO – Multi-Asset, and his team to deliver exceptional benefits to our collective clients,” said Christopher J. Guptill, Founder and Chief Investment Officer of Broadmark.
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