Man Group, a London-listed hedge fund manager, will buy Connecticut-based Silvermine Capital Management for $70m (£45m).
Man, the world's largest listed hedge fund, will pay $23.5m in cash up front, followed by two cash payments of up to $16.5m after one year, and another potential $30m after five years.
Silvermine, a leveraged loan fund with around $3.8bn under management, expects the acquisition to complete in the first quarter of next year after which it will operate under the Man GLG Silvermine name.
The deal will improve Man's standing in the US collateralised loan obligations market which bundles up and then dices a number of risky business loans.
Mark Jones, co-chief executive of Man Group said:
The acquisition of Silvermine will transform our existing credit business and position us to benefit from strong demand for US CLOs and other credit strategies. Silvermine is a highly respected, specialised business with an excellent track record of out performance.
Earlier this year the group acquired Boston-based equity firm Numeric for up to $494m. This was just weeks after a deal in which it acquired a smaller fund of hedge fund firm Pine Grove in the US.