New York Life Investments will acquire a majority stake in the $4 billion private equity and fund of hedge funds shop Private Advisors.
New York Life Investments will take a 60% stake in the investment firm while Private Advisors' equity holders will retain the remaining 40%. A significant portion of the equity holders' proceeds will be re-invested in Private Advisors' funds alongside its clients. The value of the deal, which is expected to close December 31, has not been released.
“Private Advisors has a long history of delivering risk-adjusted investment returns, with a strong focus on capital preservation. The firm has a well-defined investment process that incorporates investing in alternative investment managers with proven track records,” said John Kim, president and chief executive officer of New York Life Investments.
The Richmond, Va.-based Private Advisors employs a staff a 60, led by founder and managing partner Lou Moelchert. Commenting on the sale, Moelchert said, “We believe this structure maintains the alignment of interests between our management and our clients, it encourages employee retention, and places an emphasis on the long-term success of the firm.”
Private Advisors complements New York Life Investments' alternative capabilities in private equity and real estate as well as its broad suite of equity and fixed income strategies.
Together with its affiliates, New York Life Investments employs over 1,400 people and, as of September 2010, managed over $275 billion in assets.