December 17, 2019 / 12:33 PM / 2 months ago

FS Investments to buy money manager fund Chiron

Dec 17 (Reuters) - Credit investment firm FS Investments said on Tuesday it agreed to acquire Chiron Investment Management, a money manager co-founded by an investor at the center of the one-day stock market meltdown in 2010 that became known as the "flash crash."

Chiron, which has roughly $1.8 billion in assets under management, is led by its co-founders, Chief Executive Enrico Gaglioti and Chief Investment Officer Ryan Caldwell. It uses a mix of quantitative and qualitative research analysis to invest in global equities and fixed income.

Caldwell previously co-managed the Ivy Asset Strategy Fund at investment firm Waddell & Reed Financial Inc, whose trading U.S. regulators cited as a trigger for the crash in May 2010 that temporarily wiped out $1 trillion in market value.

Officials did not sanction Caldwell and Waddell & Reed nor did they name them, though they were quickly identified by Reuters and other news organizations.

The acquisition of Chiron, whose terms were not disclosed, is FS Investments' first acquisition since it was founded in 2007.

"Chiron's deep expertise in multi-asset investing, quantitative and fundamental investment analysis and dynamic portfolio construction complements our industry-leading alternatives (credit) business," FS Investments President and Chief Investment Officer Mike Kelly said in a statement.

Gaglioti will join FS in a "senior leadership position" and Caldwell will continue to manage Chiron's funds, FS Investments said.

Chiron's flagship fund has posted returns of 8.7% in 2019 as of Nov. 30, compared with a 21.7% rise in the S&P 500 index over the same period. Since inception, the fund is up 4.99%.

Chiron was founded in 2015 by Caldwell and Gaglioti, prior to which Gaglioti was global head of equity sales at Goldman Sachs.

Philadelphia-based FS Investments has over $24 billion in assets under management. (Reporting by Joshua Franklin in New York; Editing by Dan Grebler)

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