Chapter 11 Protection

September 2015 | DEALFRONT | BANKRUPTCY & CORPORATE RESTRUCTURING

F-Squared Investments Magazine

F-Squared Investments has filed for voluntary protection under Chapter 11 of the U.S. Bankruptcy Code and reached an agreement to transfer its operating assets to Broadmeadow Capital, a subsidiary of Cedar Capital.

Under the deal, Broadmeadow will take ownership of F-Squared’s intellectual property, investment strategies, and the majority of its client contracts. The agreement is intended to ensure a seamless handover of operations backed by an established infrastructure.

To accelerate the transaction, F-Squared is asking the court for authorization to proceed under Section 363 of the Bankruptcy Code. The agreement outlines a court-supervised auction process aimed at securing the highest or most advantageous bid for the company’s assets.

F-Squared, an asset manager serving advisers, institutions, retail investors, and retirement plans, has built its reputation on indexes and strategies derived from its AlphaSector and Applied Dynamic Replication models. Its mission is to shield clients during market downturns while allowing them to benefit from growth phases, delivering innovative approaches to meet long-term financial objectives.

“We are pleased to have engaged with Cedar Capital and Broadmeadow Capital, two firms with deep expertise and strong track records in asset management and advisory services,” said Laura Dagan, chief executive officer of F-Squared. “This transaction ensures that clients will continue to receive industry-leading service and gain access to an even broader range of strategies.”

She added that Broadmeadow shares F-Squared’s research-driven, quantitative investment philosophy. In addition, certain F-Squared employees—including investment, research, and client service professionals—will transition to Broadmeadow as part of the agreement, maintaining continuity for clients.

During the sale process, F-Squared will continue normal operations. The company has filed motions to guarantee timely payment of employee salaries and benefits and will also pay vendors in full for goods and services provided after July 8, 2015.

The Broadmeadow agreement establishes the minimum bid for the assets and remains subject to Bankruptcy Court approval and other customary conditions.

“This acquisition gives us an important opportunity to expand Broadmeadow’s product offerings,” said David Cabot, president of Broadmeadow Capital. “We believe the AlphaSector strategies and methodology still hold significant value, despite concerns raised about their pre-2009 performance history. We are committed to maintaining stability and continuity for investors.”

Broadmeadow, headquartered in Boston, specializes in quantitative asset management, helping investors navigate equity, fixed income, and commodity markets while applying hedging techniques that address volatility and investor behavior. Its parent, Cedar Capital, focuses on delivering innovative, diversified investment solutions through its extensive distribution network and service platform.

“This acquisition strengthens Cedar Capital’s role as a gateway to differentiated strategies designed to meet evolving market demands,” said Paul Ingersoll, CEO of Cedar Capital. “Once finalized, the deal will provide uninterrupted service for clients, supported by the Broadmeadow team and Cedar’s proven operational foundation.”

The final court hearing to approve the sale is expected shortly after the auction, with the closing subject to court approval and client consent.

Fraser Tennant