Westwood to buy Salient Partners’ asset management business

Westwood Holdings Group (WHG), a Dallas-based investment management boutique and wealth management firm, has agreed to acquire the asset management business of Salient Partners, a Houston-based investment firm.

Westwood will make an upfront payment of $35 million on closing, with deferred payments of up to $25 million over several years, upon satisfaction of certain revenue retention and growth targets, Westwood said in a press release Thursday. Westwood will maintain its debt-free balance sheet and will fund the upfront consideration using cash on hand.

Salient specializes in strategies focused on energy and infrastructure, tactical alternative and real estate investments. The firm manages $4.5 billion in assets. The acquisition will increase Westwood’s total assets under management by 32% to $18.4 billion, the firm said.

Under the deal, Westwood said it is acquiring Salient’s four distinct investment capabilities:

• Energy Infrastructure – 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, the Tactical Equity strategies are offered in the form of mutual funds and separately managed accounts. Through this transaction, Westwood will also acquire a substantial minority ownership stake in Broadmark.
• Real Estate – 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 – Current AUM in private investments totals $286 million.

The transaction is expected to close before the end of 2022 with significant immediate accretion to earnings.

Westwood, Salient and Broadmark’s strategies will continue under their existing fund names until close of the transaction and will be managed by the investment teams as they exist today, with the same stated investment objectives, the firm said.

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