Investment funds affiliated with Lightyear Capital, a New York-based private equity firm focused on financial services investing, are to sell RidgeWorth Holdings, the holding company for multi-boutique asset manager RidgeWorth Capital Management, to Virtus Investment Partners for USD472 million.
The transaction is not subject to financing and is subject to customary closing conditions.
Investment funds affiliated with Lightyear purchased RidgeWorth from SunTrust Banks in May 2014. RidgeWorth is an investment management firm that offers investors access to a select group of investment managers and sub-advisers. As of 30 September 2016, it had approximately USD40.2 billion in assets under management.
RidgeWorth has three wholly owned boutiques serving both its institutional and retail clients: Seix Investment Advisors, a diversified fixed income manager; Ceredex Investment Advisors, a domestic value equity manager; and Silvant Capital Management, a domestic growth equity manager.
RidgeWorth boutiques manage their investment processes autonomously while benefiting from the support of centralised administrative and operational support infrastructure, including trading, compliance, technology, accounting, retail distribution, and marketing. Virtus plans to operate the three boutiques separately and to enable them to continue their individual investment strategies.
Mark F Vassallo (pictured), managing partner of Lightyear, says: “It has been a pleasure working alongside the RidgeWorth management team to build its platform. We are pleased with the progress the firm has made and the outcome of our funds’ investment in the company. We are confident RidgeWorth will continue to be successful as part of the Virtus organization and has a bright future ahead.”
Ashi Parikh, chief executive officer and chief investment officer of RidgeWorth, says: “Lightyear has helped enable us to create the infrastructure needed to support an asset management-only firm. We are grateful for Lightyear’s support over the past few years to help grow the business and view joining Virtus as an excellent opportunity to continue building a company that is well-positioned to meet the evolving and global needs of both clients and intermediary partners.”
RBC Capital Markets and Davis Polk & Wardwell advised RidgeWorth as financial adviser and legal counsel, respectively, in connection with the transaction. Barclays Capital and Morgan Stanley acted as financial advisers to Virtus, and Willkie Farr & Gallagher was the legal adviser to Virtus in connection with this transaction.
