Fortress Investment Group announced it will acquire institutional fixed-income manager Logan Circle Partners from Guggenheim Partners for $21 million in cash.
The deal is expected to close in the second quarter, subject to investor approval, according to a Fortress news release.
Logan Circle Partners managed $12 billion as of Sept. 30 in traditional long-only and high-yield bonds. Fortress managed $32 billion in private equity and hedge funds as of the same date.
Jude T. Driscoll, CEO of Logan Circle, and senior executives will join Fortress after the deal closes and will continue to manage the fixed-income business, reporting to Fortress CEO Daniel Mudd.
“We believe this is a unique opportunity to diversify and expand Fortress's investment management business. Logan Circle has … a fundamental credit focus which is complementary to our existing approach. … Jude and his portfolio management and research team have a strong track record and extensive experience, which will immediately broaden our market perspective,” Mr. Mudd said in the release.
Guggenheim may receive an additional unspecified payment at the end of 2011, depending on growth and performance of Logan Circle, according to the Fortress news release.
Logan Circle Partners is a joint venture between Logan Circle employees and Guggenheim Partners. According to Logan Circle's ADV, Guggenheim Partners owns between 25% and 49% of the firm, and Mr. Driscoll's stake is between 50% and 74%
Neither Mr. Driscoll nor Lilly H. Donohue, managing director and head of Fortress' investor relations, returned calls seeking more information by press time. Jeff Kelley, a Guggenheim Partners' spokesman, declined to comment.
