Man Group acquires Silvermine for its revolutionary CLO management software

Man Group is a global active investment management firm. As part of its diverse portfolio, Man Group acquired Silvermine, a company specializing in structured credit and Collateralized Loan Obligations (CLOs). The company manages over $3B in collateral portfolio for CLO issuers and provides advisory services to separately managed accounts.

Silvermine’s journey to becoming a part of Man Group was largely driven by their innovative approach to CLO management, made possible by a custom software solution developed in partnership with Lumenalta. This software was designed to provide portfolio managers with recommendations to optimize the yield on the portfolio with the lowest risk profile.

As a global services provider serving clients across multiple continents, Man Group required sophisticated tools to manage their complex financial portfolios and maintain efficiency and compliance in a highly competitive and regulated market.

The financial industry, particularly CLO management, faces widespread challenges due to complex structured products and reliance on manual processes. While off-the-shelf software exists, it often lacks the flexibility to incorporate unique investment strategies and adapt to rapidly evolving markets.

Silvermine (later acquired by Man Group) needed a solution that could address these industry-wide issues while meeting their specific needs. They required a system that could embed their proprietary investment strategy, automate complex calculations, and seamlessly integrate with financial data providers like Bloomberg, S&P, and Moody’s. Their existing systems struggled with data integration, leading to inaccuracies and inefficiencies.

To compete effectively in the global market, Silvermine needed a fully customizable solution that would facilitate their decision-making, risk management, and compliance efforts. This tailored approach would not only modernize their operations but also provide a significant competitive advantage by allowing them to build a system precisely aligned with their unique strategy and operational requirements.

Lumenalta rose to the challenge by developing a comprehensive, tailor-made software application. This solution incorporated Silvermine’s unique investment strategy into its core functionality, created a custom language for analyzing loans and managing pricing data, and implemented sophisticated algorithms for investment selection, asset management, and risk mitigation. 

The software provided seamless integration with various financial data providers and offered a scalable, secure system architecture to support growth and data protection. This custom application empowered Silvermine to solidify its position as a significant player in the credits market, handling over 3,500 debt issuers and approximately 15,000 CLO securities.

With an average of 1,000 loan trades per year, the system ensures decisions are consistently data-driven and aligned with the company’s strategy.

Silvermine Capital Management’s success and ultimate acquisition by Man Group were fundamentally driven by its cutting-edge proprietary technology. This software, developed in partnership with Lumenalta, was the linchpin that set Silvermine apart in the competitive landscape of CLO management and US-levered credit portfolios.

This technological edge allowed Silvermine to:

As of November 30, 2014, Silvermine’s expertise combined with their tech-driven success translated to impressive financial results:

This outstanding performance caught the attention of Man Group. Recognizing the value of Silvermine’s proprietary system, Man Group moved to acquire the company in a deal that would not have materialized without this technological advantage.

The acquisition terms underscore the immense value Man Group placed on Silvermine’s technology-driven capabilities.

“Lumenalta was instrumental in developing the technology that transformed our operations and set us apart in the market. Without their expertise and collaborative approach, we couldn’t have built this innovative system that revolutionized our work and scale.” - Steven Kalin, former Co-leveraged Credit Head at Man Group.