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Hellman & Friedman takes stake in fund of hedge fund manager Grosvenor Capital

Private equity firm Hellman & Friedman has agreed to become a minority investor in USD24bn fund of hedge funds manager Grosvenor Capital Management by acquiring a shareholding previous

Private equity firm Hellman & Friedman has agreed to become a minority investor in USD24bn fund of hedge funds manager Grosvenor Capital Management by acquiring a shareholding previously held by long-time minority partner Value Asset Management.

Grosvenor’s management will retain control of the firm and will slightly increase its ownership share through the transaction, which will not result in any change in the firm’s personnel, operations or business strategy. Terms of the transaction were not disclosed. Grosvenor was advised by Colchester Partners and Goldman Sachs.

Founded in 1971, Grosvenor is a fund of hedge funds manager with offices in Tokyo, London and Chicago and manages some USD24bn for a geographically diverse roster of primarily institutional clients. Its investment approach involves examining and monitoring a wide array of hedge fund strategies covering a broad spectrum of risk and return characteristics and a broad range of investment managers.

‘We are enthusiastic about our new partnership with H&F,’ says Grosvenor chief executive Michael Sacks. ‘Their history in general and experience with asset management firms in particular were important factors in selecting them to be our partner. In replacing VAM with H&F, we create a stable ownership structure at Grosvenor, enabling us to continue our mission of providing clients with attractive investment returns and exemplary client service.’

Hellman & Friedman managing director Allen Thorpe says: ‘This is a terrific opportunity to invest with a best of breed firm in an exciting part of the asset management business.’ His colleague Jeffrey Goldstein adds: ‘We believe that alternative investments will continue to gain global balance sheet share as investors further appreciate the high quality risk-reward profile of the space. Grosvenor has stood for best practices in the alternative investment arena for a long time and has delivered quality risk-adjusted returns to its clients.’

VAM, which has been pursuing an orderly liquidation of its assets, has enjoyed good returns from its relationship of some 10 years with Grosvenor. ‘This has been a very successful investment for us,’ says former chief executive Dave Minella. ‘Grosvenor is a great firm and I am sure they will continue to do well.’

Founded in 1984, Hellman & Friedman has offices in San Francisco, New York and London and focuses on investing in industries including asset management, financial services, professional services, media and marketing services, software and information services and energy. The firm has raised and, through its affiliated funds, managed more than USD16bn in committed capital, and is currently investing its sixth partnership, Hellman & Friedman Capital Partners VI, with more than USD8bn in committed capital

Hellman & Friedman asset management investments include Artisan Partners, Gartmore, Mondrian Investment Partners, Brinson Partners and Franklin Templeton Investments. Other recent investments include LPL Financial, Catalina Marketing, Kronos, Sheridan Healthcare, Iris Software Group, DoubleClick and the Nasdaq Stock Market.

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