Hedge fund BlueBay Asset Management has agreed to be acquired by the Royal Bank of Canada for more than US$1.5 billion.
RBC will pay £4.85 per share for the London-based hedge fund, a nearly 30% premium to the stock's closing price Friday. BlueBay boasts some US$40 billion in assets under management, and last month announced plans to launch a series of new hedge funds, including emerging-market, high-yield and European government bond offerings.
The deal, the second major hedge fund acquisition of the year following Man Group's US$1.6 billion buyout of GLG Partners, which closed just last week, is expected to be completed by the end of the year.
"RBC's strength and stability make it an ideal partner for BlueBay," the hedge fund's CEO, Hugh Willis, said. "Its commitment to its clients and its high standards of business practices mirror our own and lie at the heart of the excellent cultural fit between our firms."
RBC said it would finance the acquisition from its cash reserves and that the deal would not have a material impact on its near-term earnings. Perella Weinberg Partners advised RBC on the acquisition. Spencer House Advisors and Credit Suisse handled matters for BlueBay.