First Quadrant Buying London-Based Objective Asset Management

First Quadrant, a fund manager with $28 billion of assets, agreed to buy London-based Objective Asset Management Ltd., a specialized manager of funds that do best when stocks and bonds are falling.

First Quadrant, a unit of Boston-based Affiliated Managers Group Inc., didn’t disclose how much it’s paying for Objective, which has about $1 billion of assets under management.

“We’re cautious about the level of stock markets, and the Objective funds allow investors to keep exposure to equities while putting a floor under the downside,” said Bill Goodsall, managing director of First Quadrant’s London-based unit.

The acquisition is First Quadrant’s first since it was formed in 1988, Goodsall said. First Quadrant, based in Pasadena, was bought by AMG about four years ago.

The acquisition also is a first for AMG, which didn’t have international units. AMG, the 11th biggest publicly traded U.S. fund company with about $74 billion in assets, has 15 money management affiliates.

The First Quadrant acquisition is an example of AMG’s support for the expansion plans of affiliates, said Sean Healey, the company’s president.

“We continue to look for potential stand-alone acquisitions outside the U.S.,” Healey said. Almost one-third of AMG’s cash flow now comes from international investments, he said, adding that affiliates Tweedy, Browne Co. and First Quadrant have London offices and manage money in international markets.

Objective, founded in 1992 by Philip Ainsworth, is “a specialist manager in enhanced indexation and downside protection strategies” for stock and bond investors, Goodsall said. The firm manages accounts for institutions, and the goal is to offer pooled funds to a wider range of investors, he said.

The Objective funds “will be particularly interesting if the market goes into a decline,” Goodsall said.

The agreement with First Quadrant offers “genuine opportunities for us to build business across major markets,” said Ainsworth, who’ll become a director in First Quadrant’s London office.

First Quadrant is known for managing “market-neutral” funds for institutional investors, including pension funds, that focus on generating total returns regardless of which way the markets are going.