Carlyle will pay up to $103 million to acquire DGAM

David M. Rubenstein
David M. Rubenstein

The Carlyle Group will acquire hedge funds-of-funds manager Diversified Global Asset Management in a deal expected to close in February.

In an agreement signed Sunday and announced on Tuesday, Carlyle Group will acquire 100% of the equity interests in DGAM for an upfront payment of about $33 million and up to $70 million over time depending on performance, according to an 8-K filing by Carlyle.

DGAM managed $6.7 billion as of Oct. 31 in customized hedge funds-of-funds strategies for a 100% institutional client base, said M. Sa'ad Shah, managing director and head of marketing, in an interview. The firm's inflows year-to-date totaled $1 billion.

DGAM will retain its name and will continue to operate from its Toronto headquarters independently, Mr. Shah said, adding that “this was what was so attractive to us, that there would be no changes in our investment or administrative operations.”

DGAM will become part of Carlyle Solutions, which managed $48 billion as of Sept. 30 in multiasset strategies. DGAM will join prior Carlyle funds-of-funds acquired managers AlpInvest, a private equity specialist, and Metropolitan Real Estate, a real estate manager, on the investment platform.

“We are focused on providing fund investors with a broad suite of investment options under one roof. With the DGAM partnership, Carlyle's Solutions is now positioned to offer investors the ability to allocate across alternatives,” said David M. Rubenstein, Carlyle's co-founder and co-CEO, in a company news release.