Palisade CM and Evercore AM carve up the remnants of Refco's FortsmannLeff. Hedge-fund and private-equity manager Angelo Gordon has pulled the plug on its traditional small- and mid-cap affiliate AG Asset Management (AGAM). The firm's core team has joined Evercore Asset Management, the institutional money-management arm of the New York-based investment bank Evercore Partners. Meanwhile AG Asset Management's growth team has joined Fort Lee, N.J.-based manager Palisade Capital Management (PCM) as part of a strategies-purchase agreement between Angelo Gordon, some of AGAM's employees and PCM.

Terms of the agreements weren't disclosed.

"The current financial climate, while challenging, is providing us with strategic opportunities for growth, and I am excited about this combination and the enhanced capability of the firm to serve our existing and new clients," says PCM's CEO Martin Berman.

Forerunner

Angelo Gordon bought ForstmanLeff from its management in 2006 -- the same management team that had repurchased control of the company from its erstwhile owner Refco about six months earlier. Refco, a derivative-trading company, went belly up in a late-2005 hidden-debt scandal that some view as a precursor to Wall Street's present woes. Refco's collapse put an end to Old Mutual Asset Management's plan to buy ForstmanLeff.

Angelo Gordon changed the ForstmannLeff name to AG Asset Management in 2007.

AGAM managed $2.6 billion early in 2008, mainly for non-high-net-worth individuals, according to its last ADV filing with the SEC. PCM says the team it just acquired in the deal managed about $600 million. When Angelo Gordon bought AGAM -- or ForstmannLeff as it was called then -- in 2006, it spanned the whole "cap" spectrum in U.S. equities and managed about $2.7 billion.

Late in 2007 AGAM was still highlighting large-cap strategies in addition to small-, mid, "smid-" and multi-cap strategies, according to a cached version of its website.

Greg Sawers, CEO of Evercore Asset Management, says the AGAM core team's "one stock at a time" investment process complements can "offer a more comprehensive suite of investment services in the small- and mid-cap space to the institutional marketplace," he adds.

PCM's co-CIO Dennison Veru says the AGAM growth team's investment philosophy and processes closely resemble its own "time tested" methods." Adds Veru: "Because there is no product overlap" the new investment team "will continue to operate autonomously while leveraging PCM's research, core competencies and infrastructure."

Joining PCM from AGAM are portfolio managers Will Potter and Sammy Oh along with Allen Margolius, Brian Zimmerman, Lisa Chai, Kris Tomasovic Nelson, Brian Deitelzweig and Damon Gough. AGAM's chairman John Myers and its CIO Beth Dater are joining PCM as "special advisors."

Making the move from AGAM to Evercore Asset Management are core-equities CIO Christopher Fasciano, portfolio manager Timothy Buckley and analysts Michael Evans, Susan Hager and Ray Lewis.

Evercore Asset Management had about $490 million in assets under management in January 2008 -- the last time it updated its ADV filing. PCM says it managed about $1.7 billion, mainly for high-net-worth individuals, at the end of 2008. -FWR

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