First Eagle secures significant long-term investment from Blackstone and Corsair Capital
A majority long-term investment is to be made in First Eagle Investment Management by private equity funds managed by Blackstone and Corsair Capital as well as clients of the two firms.
The investment, which reflects a total enterprise value of approximately USD4 billion, is designed to ensure that First Eagle will continue to operate independently and to maintain its investment-centric culture. Additionally, as a result of the transaction, First Eagle employees will have an opportunity to meaningfully increase their equity ownership in the Firm. The investment is being made through First Eagle’s holding company, Arnhold and S. Bleichroeder Holdings Inc. The transaction includes the sale by TA Associates of its entire investment in First Eagle.
First Eagle is an independent, privately-held asset management firm which manages approximately USD100 billion in assets on behalf of institutional and individual clients. With the core purpose of providing prudent stewardship of its clients’ assets, the Firm is focused on fundamental, flexible and benchmark-agnostic investing, including strategies which seek to provide clients with downside protection. First Eagle’s investment capabilities include equity, fixed income and multi-asset strategies.
First Eagle’s senior management and investment leadership fully support the long-term investment by Blackstone and Corsair, will retain significant ownership in the Firm, and will continue to run the business on a day-to-day basis. The family shareholders, who are members of the founding Arnhold family (the “Family”), will remain substantial shareholders in First Eagle and will retain their role on the Board following the closing of the transaction. Blackstone and Corsair will exercise their oversight of the business at the Board level and will not be involved in the day-to-day management of the Firm.
Bridget Macaskill (pictured), President and Chief Executive Officer of First Eagle Investment Management, says: “Through this agreement with Blackstone and Corsair, two successful long-term investors with whom First Eagle shares many cultural and philosophical beliefs, we have achieved our primary goals of remaining independent, preserving our investment-centric culture, and increasing employee ownership, while addressing the liquidity needs of current shareholders.”
John Arnhold, Chairman and Chief Investment Officer of First Eagle Investment Management, adds: “The Family is pleased with the long-term stability that this investment provides the Firm and our clients. We look forward to maintaining our involvement with First Eagle and remaining one of the Firm’s largest clients."
D T Ignacio Jayanti, Managing Partner of Corsair, said: “Corsair is excited to be investing in First Eagle and to be working with management, the investment teams and the Family to the benefit of all of First Eagle’s stakeholders. We are impressed with First Eagle’s ability to invest successfully for its clients through market cycles and establish itself as a premier specialist active asset management firm. Our investment is predicated on the belief that strategies offered by First Eagle will continue to be attractive to clients over the long-term.”
Joseph Baratta, Blackstone’s Global Head of Private Equity, said: “First Eagle is a first class asset management firm with excellent investment talent. As investors with deep knowledge of the asset management space, Blackstone understands and respects First Eagle’s culture and investment philosophy, and we recognize that preserving these is critical to the long-term success of the Firm. We will support First Eagle’s management and employees as they seek to provide outstanding investment performance and service to their clients.”
P. Andrews McLane of TA Associates, said: “We are very pleased with the outcome of TA’s partnership with First Eagle. During this time of unprecedented market turbulence, we have been impressed with First Eagle’s prudent stewardship of its clients’ assets, and we believe that it is well positioned to prosper in the future. As we exit our investment, we would like to thank the management of First Eagle and the Family for their continued strong leadership in building value in First Eagle. Roger Kafker and I have enjoyed the opportunity to serve on the Board of First Eagle over the past eight years.”
The transaction is expected to close in the fourth quarter of 2015 subject to receipt of consent by both First Eagle’s mutual fund board and fund shareholders, as well as customary regulatory approvals.
Bank of America Merrill Lynch served as financial advisor and Skadden, Arps, Slate, Meagher & Flom LLP served as legal counsel to the Firm. HSBC and Morgan Stanley served as financial advisors and Simpson Thacher & Bartlett LLP served as legal counsel to Blackstone and Corsair.