Liberty Group Limited (Liberty Life) announced this month it plans to sell its fund of hedge fund subsidiary, Liberty Ermitage Jersey Limited (LE).
Caledonia Investments plc and LEs management team, head by Paul Myners, is acquiring the company.
Caledonia Investments will own 60 percent of the fund, and Myners, a veteran fund manager and author of a celebrated institutional investment report for the UK treasury, will take the remaining 40 percent.
The transaction is subject to regulatory approvals and is scheduled to close during the second quarter of 2006, an LE news release said.
LE is one of the largest offshore hedge fund management groups based in Europe. It manages about $1.8 billion in 12 funds of hedge funds and $0.6 billion in money market funds. LE also manages long-only funds which will STANLIB will acquire, though the deal is not part of this transaction. LEs fund administration business in Luxembourg is also excluded from the transaction.
The company said the potential total acquisition price is GBP41.1 million, payable in cash, and is split between an initial consideration of GBP35.1 million and up to a further GBP6 million payable over the next three years, dependent upon the level of assets managed in that period by Ermitage.
“I am pleased that we have been able to reach agreement with Caledonia and the management team,” said Myles Ruck, chief executive of Liberty Life. “LE’s business has now achieved critical mass, built around a robust and stable technology platform, a highly skilled research teamand a proven investment process. Caledonia’s strong reputation, understanding of the asset management sector and willingness to invest for the long term makes them an ideal partner for the senior management team of LE. Liberty Life will continue to be a client of the business and we look forward to seeing the business continue to flourish on an independent basis.”