Rosemont Investment Partners will acquire a 30% minority interest in Piedmont Investment Advisors, a Durham, N.C.-based active equity and fixed-income money management boutique.
Terms of the deal, which is expected to close later this month, weren’t disclosed.
The transaction will leave Piedmont Investment’s management team holding a 70% stake in the firm, while consolidating outside interest in one strong equity partner, said Isaac Green, Piedmont’s president and CEO, in a telephone interview.
The transaction with Rosemont will allow Piedmont to provide liquidity to its original seed investor, North Carolina Mutual Life, which had a 10% stake, and to Legato Capital Management Ventures and the $225.3 billion California Public Employees’ Retirement System, Sacramento, which together held a 20% stake.
On April 1, Legato and CalPERS announced the sale of the minority stake they acquired in Piedmont in 2007 under CalPERS’ Manager Development Program II. According to a Legato news release, the CalPERS’ program provides venture capital to new and emerging firms that have less than $2 billion in assets under management. During the four years of their investment, Piedmont’s AUM jumped to roughly $3.5 billion from $750 million, the release said.
Despite that strong growth, Mr. Green said Piedmont remains a “growth stage company,” and the investment by Rosemont will allow the firm to continue expanding.
Rosemont will invest in Piedmont through its private equity fund, Rosemont Partners II. In a telephone interview, David D. Silvera, a managing director with Rosemont, called Piedmont a great firm, with superior management, and continued strong growth prospects. Rosemont typically invests in money management portfolio companies for between four and seven years.