Japan's Orix To Buy Hedge Fund Mariner

Oct 20 2010 | 3:03am ET

The consolidation of the hedge fund industry continues apace with Orix Corp. of Japan's deal for hedge fund Mariner Investment Group.

Orix's ORIX USA Corp. will take a majority stake in Harrison, N.Y.-based Mariner's parent company, MIG Holdings. Terms of the deal were not disclosed, but Nikkei English News reports that Orix will pay about ¥15 billion (US$184 million) for the stake.

Mariner's current partners will maintain a significant stake in the US$11.7 billion hedge fund manager, Orix said. The firm's current management will retain full control of investment and day-to-day management decisions, and have agreed to reinvest all of their proceeds from the sale in Mariner's business and funds.

"The strategic partnership with Orix in Japan—and throughout Asia—is particularly exciting as the region offers a burgeoning opportunity for both investment strategies and distribution," Mariner CEO Bracebridge Young said. "We believe the Orix alliance also enhances Mariner's ability to offer investment options for domestic institutional clients seeking a wide array of high-quality investment opportunities."

The Orix-Mariner deal follows two other hedge fund acquisitions planned or completed in recent weeks. The Man Group closed its US$1.6 billion deal for GLG Partners last week, and the Royal Bank of Canada this week announced a US$1.5 billion deal for London hedge fund BlueBay Asset Management.

Orix was advised by its own investment bank, Houlihan Lokey, on the Mariner deal, while the hedge fund was advised by Morgan Stanley and Deutsche Bank.

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