Sparx Asset Management, the listed independent Japanese investment manager, has announced its intention to buy Hong KongÆs PMA Capital Management. The combined entity will have assets under management of $8 billion and Sparx says it will be the largest alternative investment manager in Asia.

The deal, which remains subject to the regulators nod, is priced at $226 million in cash and Sparx shares.

The joint plan sees PMA retaining its alternatives focus with its current business operations. All of its managers will stay on board, spearheaded by its chief executive officer Farhat Malik. Some of the PMA top managers will become major shareholders within Sparx.

Sparx Asset Management was founded in 1989 by Shuhei Abe. It explores a range of approaches to the markets, from opportunistic long/short strategies, to a longer term fundamental approach. Among its alternatives products, it operates both a global and Asia Pacific funds-of-funds.

Some industry sources regard PMA to be the biggest and best home-grown hedge fund/alternative investment manager. It was established in 2002 with offices in Hong Kong, Dubai and London.