NEWS
PGI to secure majority stake in Liongate
05 March 2013
Category:
News, Global, USA, United Kingdom
By Asia Asset Management
Principal Global Investors (PGI) has agreed to acquire a 55% stake in Liongate Capital Management (Liongate), a global alternative investment boutique based in London and New York focused on managing portfolios of hedge funds.
Founded in 2003, Liongate has approximately US$2.1 billion in assets under management across a range of commingled funds and dedicated client portfolios. Its client base includes many of the world’s leading pension funds, insurance companies and sovereign wealth funds. Liongate is recognised for its dynamic approach to asset allocation and managed hedge solutions, which have delivered strong, long-term risk-adjusted returns to its blue-chip investor base.
The transaction will strengthen the Principal Financial Group’s (PFG’s), of which PGI belongs, alternative investment capabilities, deepen its pool of investment talent, and help extend its product offerings into customised multi-asset and hedge fund solutions.
“With its strong reputation and focused investment expertise, Liongate is a welcome addition to our multi-boutique investment management structure,” said Andrea Muller, chief executive, Asia of PGI. “The partnership will enhance our capabilities in alternative investments, which is an area where client demand continues to grow. Very few institutional investment firms have this level of expertise in hedge fund investing.”
Being affiliated with a global investment management leader, Liongate will benefit from access to PFG’s global footprint and strong distribution networks, as well as its product development expertise and best-practice support infrastructure.
“Our clients increasingly want hedged solutions over their entire portfolios, and not just on an ‘alternatives’ side plate. The operational synergies and economies of scale will enhance our client resources globally, enabling Liongate to focus on consistent, risk-adjusted client performance. PFG gets what we want to do, and our personal chemistry is strong, so that is why we decided to work together,” said Randall Dillard, chief investment officer and co-founder of Liongate.
The Liongate partners will retain a 45% share and will manage Liongate within their current roles. The partners are reinvesting a significant share of their consideration into existing Liongate investment strategies.
The transaction is expected to close in the second quarter of 2013, pending regulatory approval. PFG estimates the acquisition will be slightly accretive in the first year. Sandler O'Neill and Partners advised PFG on the transaction and Fenchurch Advisory Partners advised Liongate.
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