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Knight Capital to Buy Astor Asset Management

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Knight Capital Group, Inc. is getting into the asset management business. The electronic-trading firm announced that it was buying Astor Asset Management, LLC for about $20 million in cash and stock, according to a July 26 announcement.

Knight Capital Group, which said in its news release that it was the “leading source of liquidity in U.S. equities by share volume,” was itself publicly traded on the NYSE Euronext exchange under the symbol KCG.

Astor Asset Management, headquartered in Chicago, is an SEC-registered investment advisor with $560 million in assets under management in the Astor Long/Short ETF Mutual Fund, and in ETFs in separate accounts. The firm uses “proprietary macroeconomic models” in its investment process and seeks “capital appreciation while managing risk in diverse market conditions” for its investors. Astor was founded in 2001 by Managing Partner Robert N. Stein, who has a four-year contract under the deal, which is scheduled to close in the fourth quarter, according to the firms’ statement.

“Astor assets under management in the separately managed accounts and new mutual fund have increased substantially in the past few years. I believe we can help Astor get to the next level while creating a foundation for asset management that contributes stable, recurring revenues to Knight, ” Knight Capital Group Chairman and CEO, Thomas M. Joyce, said in the release.

Comments? Please send them to [email protected]. Kate McBride is editor in chief of Wealth Manager and a member of The Committee for the Fiduciary Standard.