TPG-Axon, Montrica To Merge

Aug 3 2010 | 11:46am ET

TPG-Axon Capital Management plans to merge with London-based hedge fund Montrica Investment Management, creating a hedge fund with about US$9 billion in assets.

The two hedge funds announced their plans in a letter to clients dated today. TPG-Axon said it hoped the deal would give it a stronger presence in Europe, while Montrica talked up the benefits of being part of a larger firm.

“Montrica will benefit from scale advantages including better access to company management teams, better leverage with counterparties, and further enhancements to its existing back office support function,” it said in the letter.

News of the tie-up was first reported by the Financial Times.

The merger reunites a pair of former Goldman Sachs traders, New York-based TPG-Axon’s Dinakar Singh and Montrica’s Andrew Metcalf. Singh was CEO of Goldman Sachs’ proprietary trading business before founding TPG-Axon along with private equity firm Texas-Pacific Group in 2005; Montrica was spun off from that business a year later.

Montrica, which manages about US$1.1 billion, will keep its name as part of TPG-Axon; Metcalf and Montrica co-founders Svein Høgset and Frederik Juntti will become partners at the combined TPG-Axon. Svein Høgset worked under Metcalf and Singh at Goldman Sachs Principal Strategies, while Juntti worked at Citadel Investment Group.

No money is changing hands as part of the deal.

Both funds were hit hard by the financial crisis; Montrica’s assets slipped by about two-thirds and TPG-Axon’s by about half.

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