LONDON, March 4 U.S. asset manager Principal
Global Investors said on Monday it is to buy a majority stake in
hedge fund investor Liongate Capital Management, the latest deal
to emerge in the struggling industry.
Principal has agreed to acquire 55 percent of London- and
New York-based Liongate, which was founded in 2003 and manages
around $2.1 billion in assets, the firm said in a statement.
Liongate's management will hold on to the remaining 45
percent while reinvesting a significant share of the deal's
proceeds into Liongate's existing investment funds. The value of
the purchase was not disclosed.
The deal is the latest in the $627 billion fund of hedge
These investors, which try to pick the best managers and
reduce risk by holding a basket of funds, have been hurt by
criticism about their high fees and poor returns.
In December Legg Mason announced it was buying Fauchier
Partners, one of London's oldest fund-of-hedge-funds firms, from
BNP Paribas Investment Partners.
Other deals last year included Franklin Resources
buying a majority stake in K2 Advisors, private equity group
Kohlberg Kravis Robert's buyout of Prisma Capital
Partners, and Man Group's purchase of FRM.
Principal Global, the investment arm of insurer Principal
Financial Group, manages $281.5 billion in assets. The
Liongate stake is not its first move into hedge funds.
In 2011 it bought 51 percent of Finisterre Capital, a
London-based emerging markets manager.