Wednesday, 22 March 2017
Last updated 22 hours ago
Dec 13 2012 | 9:56am ET
The fund of hedge funds world just consolidated a little further: Permal, one of the largest FoFs in the world, will acquire rival Fauchier Partners.
Asset management giant Legg Mason, Permal's owner, did not reveal the value of the transaction which will create Europe's largest fund of hedge funds with about $24 billion in assets under management. London-based Fauchier, founded in 1994 by Patrick Fauchier and Christopher Fawcett, manages about $6 billion.
The combined businesses will be led by Permal’s Robert Kaplan and Fauchier's Clark Fenton.
The transaction is expected to close in the first quarter of 2013.
Legg Mason says Permal and Fauchier operate in different markets and specialize in different areas. Permal, with an established clientele among U.S. institutions, is known for its equity hedged and event-driven strategies. Fauchier, with European and Asia Pacific pension fund and insurance clients, focuses on fixed-income, credit and macro investing.
A continued partnership with BNP Paribas Investment Partners includes a global distribution agreement for Fauchier and Permal products.
Said Joe Sullivan, interim Legg Mason CEO, in a statement: “This transaction significantly expands Permal’s institutional business, creating a global institutional capability across geographies and client profiles. The strength of this combined platform will be an important driver of Permal’s future growth as clients in the alternatives sector increasingly look for providers with size and scale. This is an important step to growing our alternatives capabilities through Permal. This deal will be accretive to the Legg Mason shareholder in the first year, reflecting our ongoing commitment to creating shareholder value.”
According to Hedge Fund Research's most recent data, there are now 1,897 hedge funds of funds worldwide, down from the record 2,462 in 2007. To date in 2012, 74 hedge funds of funds have closed their doors.