Hedge fund firm Cadogan inks spin off from Fortis

BOSTON (Reuters) - Hedge fund group Cadogan Management LLC has signed a deal to spin off from Fortis Bank, taking a step that investors expect will attract new assets because it eases uncertainty about the firm's future.

New York-based Cadogan will be fully owned by its employees after the deal closes, the company said. Five top executives, who left the firm a few weeks ago, have returned to the firm.

Cadogan was part of Fortis' money management arm. Fortis will come under BNP Paribas' control later this year when the French bank is expected to complete its acquisition of Fortis.

Financial terms were not disclosed.

The deal is expected to end a period of great uncertainty at the hedge fund of funds firm which invests roughly $3.6 billion (2.2 billion pounds) for endowments and wealthy investors with hedge funds.

Cadogan was expected to come under the umbrella of BNP Paribas, which already has a hedge fund investing unit.

When talks for the management buyout seemed to stall, the group's top five managers abruptly left.

Now all five -- Stuart Leaf, Paul Isaac, Michael Waldron, Richard Collier, and Joel Gantcher -- have returned to the firm. A group of Cadogan principals already owned 30 percent of the business and were instrumental in buying the rest back.

The deal is expected to close as soon as regulator Financial Services Authority approves it, the company said.

(Reporting by Svea Herbst-Bayliss; Editing by Phil Berlowitz)