* FLAG will have $6 bln in assets after acquisition
* Squadron team to stay in place after acquisition-source
* FLAG's Asia principal to have snr role after merger-source
* Miller put Squadron up for sale after a review - sources
* Acquisition gives U.S. based FLAG a presence in Asia
By Stephen Aldred
HONG KONG, Oct 23 U.S. private equity investor
FLAG Capital Management said it has agreed to buy Squadron
Capital Advisors, an Asian private investment firm with $1.5
billion in assets controlled by the founder of Duty Free
Shopping outlets Robert W. Miller.
The deal, set to be the first acquisition of a fund of funds
in Asia's private equity industry, is expected to involve
Squadron's team of around 23 people, including chief executive
David Pierce, staying on board, a source previously told
"Squadron has one of the most experienced private equity
fund of funds teams in Asia, and we are excited to be joining
such a terrific organisation," said Pierce, who will become a
partner after Squadron is integrated into FLAG.
Fund of funds pool capital to invest in selected private
equity and hedge funds on behalf of other investors. The value
of the deal was not disclosed, but the acquisition will give
FLAG, which was founded in 1994, $6 billion in assets.
Miller put Squadron Capital, founded in 2006 and one of the
region's best known fund of funds, up for sale after of a
strategic review, other sources said.
FLAG Capital's Asia-based principal Tina Wei is expected to
have a senior role after the acquisition is complete, one of
those sources said.
Wei declined to comment. The sources could not be named as
details of the merger were private.
The acquisition gives the U.S. firm, established in 1994, a
presence in Asia through an established platform.
Squadron is a unit of Miller's Search Investment Group,
which he founded in the early 1970s, according to information on
the Search website. Squadron Capital manages the group's private
equity and direct investment portfolios.
Squadron also manages funds and investment programmes for
investors across the Asia region, and in 2011 established a $150
million programme with Finnish government pensions institution
Keva to invest in private equity funds in China, India and
Duty Free Shopping, which Miller co-founded, is now co-owned
by luxury retailer and investor LVMH Moet Hennessy Louis Vuitton
SA of France.
The Search Investment Group is also a shareholder in
Ortelius Capital Partners, an investment firm with offices in
New York and London that was founded in 2002 by Miller's
son-in-law, HRH Prince Pavlos of Greece.
The acquisition of Squadron from Search is expected to close
on or before December 31, 2012.