Ramius is merging with the boutique investment bank Cowen Group in an all stock deal valued at almost $200 million.

The resulting company will retain the Cowen name with Ramius as its investment advisor subsidiary. Ramius and an unnamed investor in the company will receive shares representing 71.24% of the combined Cowen Group.

Ramius, founded in 1994, manages around $7.7 billion in its hedge funds and real estate vehicles. Its assets shrunk from over $10 billion at the beginning of 2008 due to investment losses and redemptions. It also had some assets tied up in the Lehman Brothers collapse.

In December 2008, Ramius said it would close four of its funds, including those investing in convertible bonds and credit instruments.

Cowen was spun off from Société Générale in 2006, having been acquired by the French bank eight years earlier. It has struggled to be profitable since then.

Ramius founder Peter Cohen will become chief executive of the combined company, while Cowen's CEO, Greg Malcolm, will head the broker dealer unit.

Cohen said there was no significant overlap between the companies.

Ramius's internal asset management business will be headed-up by Morgan Stark while Thomas Straus will continue as CEO of its fund of funds group.

The deal is expected to close in the final quarter of 2009 subject to regulatory and shareholder approval. The merger was unanimously approved by Cowen's board of directors.