PGL, the privately-owned financial services development capital group, has signed a definitive agreement to dispose of its majority stake in Origin Asset Management, LLP, (Origin) to Principal Global Investors, LLC, a leading global asset manager and a member of the Principal Financial Group (NYSE:PFG). Total consideration, including proceeds to other vendors, will be approximately GBP41 million. Origin is an established global equity specialist based in London.
Origin was founded in 2005 by a respected team of investment managers in partnership with IPGL, a private holding company. The firm now has approximately USD3 billion[1] in assets under management in Global and International equities. Additionally, Origin recently launched two new products: Global Smaller Company and Emerging Market Funds. Origin partners will retain a 26 percent stake in the business and will be reinvesting a substantial share of their consideration into funds managed by the firm.
IPGL is one the most active participants in the UK financial services sector and has completed 21 transactions in the sector to date, of which 13 have been exited. With its in depth sector knowledge, permanent capital and an entrepreneurial approach, IPGL positions itself as the ideal partner for financial services entrepreneurs looking to establish new businesses or successful executives considering a management buyout.
Matt Wreford (pictured), IPGL director, says: “Our involvement with Origin has been rewarding both financially and professionally. We have enjoyed partnering with the Origin team over the past 6 years and fully expect them to continue to prosper in this new relationship. We intend to re-invest the proceeds of the sale into other entrepreneurial financial services companies looking to emulate Origin’s success.”
IPGL expects to make a 9.3x return on its original GBP4 million investment through a combination of partnership profit share and sale proceeds, which together will have generated a total IRR of 48% over the six-year lifetime of the investment. The net sale proceeds to IPGL of approximately GBP30 million will be available for further investments.
Nigel Dutson, Managing Partner of Origin, says: “We have thoroughly enjoyed our time working with the team at IPGL and have valued their strong support, flexible approach and consistently wise counsel. We are excited to be teaming up with Principal Global Investors. This strategic partnership will allow us to continue the development of our business around the world while maintaining our operating independence, distinctive investment process and organisational culture.”
The transaction is expected to close in October 2011, pending regulatory approval.
