Kudu Investment Management has acquired a minority interest in Granahan Investment Management, a small-cap equities investment boutique with $5.8 billion in assets under management. Financial terms were not disclosed.
As part of the deal, Granahan's employees will continue to maintain a more than 75% ownership stake in the firm. Granahan will also retain autonomy over its operations.
"We back these teams and don't interfere with their process," said Rob Jakacki, CEO of Kudu, in a phone interview. "They have a free hand running their firm day-to-day."
Mr. Jakacki added that Granahan has "a unique culture oriented around strong investment capabilities," which is what drew Kudu to the firm. "They have within each product vertical a really talented group of individuals, (and) their performance figures reflect the quality of those teams."
Colchester Partners LLC served as financial adviser to Granahan, and Mintz, Levin, Cohn, Ferris, Glovsky and Popeo was legal adviser. Seward & Kissel served as legal advisers to Kudu.
Kudu Investment Management provides capital to money managers and wealth managers. It has now made minority investments in 18 asset and wealth management firms that collectively have $100 billion in assets under management.