GAM has expanded with the acquisition of an investment specialist firm with links to the UK's University of Cambridge.

Switzerland-listed investment firm GAM has acquired Cantab Capital Partners, a UK multi-strategy systematic manager that oversees $4.0 billion in assets for institutional clients worldwide.

GAM will acquire all of Cantab's investment management business, except for 40 per cent of future performance fees, which are retained by Cantab's partners.

The consideration consists of an upfront cash payment of $217 million at closing and deferred consideration payable in years three through five thereafter. The deferred consideration will be based on management fee revenues from the strategies managed by the Cantab team for 2018, 2019 and 2020, payable after each period end. Based on 2015 management fee revenues, the deferred consideration would total approximately $75 million.

At the same time, GAM said today it has launched GAM Systematic, a new investment platform. Cantab will form the cornerstone of GAM Systematic.

Founded in 2006, Cantab manages two flagship programmes; it has 56 employees, the majority of whom are dedicated to investment and technology research and hold advanced degrees in mathematics, physics, statistics, computer science or other quantitative disciplines.

GAM said that in shifting into what is called “scalable systematic investing”, it is taking a major step to deliver on its long-term objective to expand and diversify its active asset management business. Systematic strategies are attracting “substantial allocations” from investors globally, it said, due to their compelling returns and their rigorous, disciplined investment processes. (A systematic strategy is one that uses computer models for the majority of its trades, in contrast to a discretionary approach.)

GAM Systematic will also be an “innovation hub for the development of new technologies, investment ideas and approaches for systematic strategies and products,” GAM said.

London-based GAM will promote the new systematic products through its distribution team of more than 80 relationship managers serving clients worldwide.

Following completion of the transaction, all of Cantab's 56 employees will join GAM. They will remain based in Cambridge, and Cantab's investment approach and programmes will be unaffected by the transaction.

"The market turmoil following the UK referendum last week has only reinforced our determination to pursue, and deliver on, our strategy of diversification and long-term growth. In Cantab we are acquiring industry-leading intellectual capital, a highly distinguished decade-long investment performance track record, and a profitable and scalable business,” said Alexander Friedman, group chief executive of GAM.

Cantab was founded by its chief investment officer, Dr Ewan Kirk. Prior to establishing Cantab, Dr Kirk was a partner at Goldman Sachs, where he managed the quantitative strategies group in Europe and developed the bank's global quantitative technology and trading platform across commodities, currencies, interest rates, credit and equity.

The business is linked to the University of Cambridge. Cantab partners recently funded the Cantab Capital Institute for Mathematics of Information, a PhD programme in data sciences within the University's Faculty of Mathematics. The programme brings a multi-disciplinary approach to the use of fundamental mathematical techniques and computer science for research in big data topics such as financial markets, risk management, healthcare, biology, climate sciences and public policy.

The transaction is subject to customary regulatory approvals and is therefore expected to close in the second half of 2016.