Principal Global Investors agreed to purchase a 55% stake of Liongate Capital Management, a London-based hedge funds-of-funds manager with $2.1 billion in assets under management, according to an announcement by Principal.
Financial terms were not disclosed.
The deal will enhance Principal's capabilities in alternative strategies, particularly in multiasset solutions, “an area where there's a lot of (client) demand right now,” Jim McCaughan, Principal CEO, said in a telephone interview. When finalized, Liongate will be the first hedge funds of funds manager within Principal's multiboutique.
Liongate, on the other hand, will likely benefit from Principal's global distribution network, Mr. McCaughan said. Liongate's partners will retain the remaining 45% and operate autonomously in their current roles. Liongate will keep its branding.
“The operational synergies and economies of scale will enhance our client resources globally, enabling Liongate to focus on consistent, risk-adjusted client performance,” Randall Dillard, chief investment officer and co-founder of Liongate, said in a news release about the deal.
Principal Global Investors, which is part of the Principal Financial Group, has about $281 billion in assets under management, about 20% of which is sourced from outside the U.S. Mr. McCaughan added that Principal continues to look for attractive acquisition targets outside of the U.S., particularly in alternatives, including ex-U.S. real estate and frontier markets.
Principal's proposed acquisition of Liongate is expected to close in the second quarter, pending regulatory approval.
Sandler O'Neill + Partners was financial adviser to Principal on the deal and Fenchurch Advisory Partners was the financial adviser to Liongate.