Australia's Macquarie to buy stake in fund manager Allegiance

NEW YORK, March 6 (Reuters) - Australian investment bank Macquarie Group Ltd (MQG.AX: Quote, Profile, Research, Stock Buzz) said on Thursday it agreed to acquire a majority stake in Allegiance Investment Management, a California fixed-income fund manager.

Allegiance, based in Huntington Beach, manages about $4.5 billion in fixed-income products. Terms of the deal were not disclosed.

Macquarie said the deal would help its investments arm, Macquarie Funds Management Group, expand its presence in the United States and other international markets.

"This partnership provides us with a platform to build broader fixed-income capability for our clients in one of the world's largest fixed income-markets," Ben Bruck, the head of Macquarie's fund management arm, said in a statement.

Allegiance Chief Executive Mark Torline and Chief Investment Officer Bill Mawhorter will maintain their roles at the firm.

Macquarie recently said it would significantly cut back on its domestic mortgage business because of rising costs caused by the global credit crisis. (Reporting by Steven Bertoni, editing by Maureen Bavdek)