E=MC2
The era of multi-convergence for investment management.
A very important convergence trend for traditional asset managers has been to build up expertise in alternatives, to present holistic investment solutions and asset allocation views to institutional clients around the world.
After half a dozen acquisitions in Latin America as well as hedge moves via Finisterre Capital and Columbus Circle Investors in the last few years, retirement provider Principal Group this week bought a majority stake of 55% in Liongate Capital Management (not Lionsgate, the independent film maker, that would be another kind of convergence).
The expertise will help Principal to build out skills in EM and alternatives in fee-based frameworks, which is where Jim McCaughan, CEO of Principal Global Investor, sees a secular shift in client demand.
LCM was founded ten years ago and has slightly over $2 billion in hedge fund assets in commingled and dedicated client funds, with offices in London and NY. The client base includes pension funds, insurance companies and SWFs, mostly with a focus on dynamic asset allocation and managed hedge solutions.
The deal will strengthen Principal’s alternative investment capabilities, deepen its pool of investment talent, and help extend its product offerings into customized multi-asset and hedge fund solutions.
As I have written on numerous occasions in the last few months, deals including Franklin Templeton/K2, KKR/Schwab, GCS/Dexia, and many many more have accelerated the pace of convergence between traditional and alternative managers.
Welcome to E=MC2, just in case you haven’t through through the global implications yet.
I invite you to follow me on twitter @danenskat
(c) Enskat Associates 2012
More details on the global M&A in the asset management industry can be found in EAQ, a quarterly asset management review featuring thought leaders globally.
Warren Enskat Group 