Wednesday, 30 July 2014
Last updated 3 hours ago
Oct 3 2012 | 1:40pm ET
The Carlyle Group added commodities trading to its lineup with a deal for hedge fund Vermillion Asset Management.
Washington, D.C.-based Carlyle paid an undisclosed amount of cash and stock for 55% of New York-based Vermillion, which has about $2.2 billion in commodity fund assets under management. The firm, led by co-founders Drew Gilbert and Chris Nygaard, trades agricultural energy, metals and soft commodities.
Both Gilbert and Nygaard will remain with the hedge fund and will continue to lead its day-to-day operations. Vermillion will serve as Carlyle's exclusive commodities platform.
Under the deal, Carlyle will make performance-based contingent payments over the next five-plus years. At most, it will pay Vermillion's principals less than 0.5% of Carlyle shares outstanding, worth, at today's prices, about $37 million; the cash will be reinvested in Vermillion's funds.
"For many years, Carlyle has successfully invested in a variety of energy, agriculture and infrastructure companies," Carlyle's Mitch Petrick said. "Vermillion employs a liquid, relative-value, low-volatility approach to trading both physical commodities and their derivatives to produce positive, uncorrelated returns."
Drew and Nygaard set up Vermillion in 2005.
Jul 8 2014 | 10:48am ET
The surge in derivatives regulation is among the most complex challenges facing the financial services industry today. Northern Trust’s Joshua Satten recently spoke with FINalternatives to share insights into the challenges presented by new regulation and explore how the industry is responding. Read more…