Principal Global Investors, LLC (PGI) has taken a 55 per cent stake in London- and New York-based hedge fund manager Liongate Capital Management.
Liongate has around US$2.1 billion in assets under management across "a range of commingled funds and dedicated client portfolios", with clients including large pension funds, insurance companies and sovereign wealth funds, PGI said in a statement.
PGI said the transaction will "strengthen its alternative investment capabilities, deepen its pool of investment talent, and help extend its product offerings into customised multi-asset and hedge fund solutions."
PGI chief executive Jim McCaughan said alternative investments is an area where client demand continues to grow. "Very few institutional investment firms have this level of expertise in hedge fund investing," he added.
Liongate will now leverage PGI's global distribution networks, product development expertise and best practice support infrastructure, according to the statement.
"Our clients increasingly want hedged solutions over their entire portfolios, and not just on an 'alternatives' side plate," said Liongate co-founder and chief investment officer Randall Dillard.
The agreement will enhance Liongate's resources, allowing it to focus more on returning performance for clients, he added.
Under the agreement the Liongate partners will retain a 45 per cent share and will manage Liongate within their current roles. The partners will reinvest a significant share of their consideration into existing Liongate investment strategies, according to the statement.
The transaction is expected to close in the second quarter of 2013, pending regulatory approval. PGI estimated the acquisition would be slightly accretive in the first year.
