Wednesday, 25 May 2016
Last updated 4 hours ago
Nov 26 2013 | 12:41pm ET
The Carlyle Group has agreed to buy fund of hedge funds Diversified Global Asset Management, giving the firm a platform for such investments.
The Washington, D.C.-based private-equity giant will pay as much as US$103 million for the Toronto-based firm, which will become its fund of funds platform. DGAM has more than US$6.7 billion in assets under management.
The deal, which will pay US$33 million upfront, with up to $70 million in additional performance-based payouts over the next seven years, is expected to close in February. DGAM founders George Main and Warren Wright will remain CEO and chief investment officer, respectively, of the firm and continue to run its day-to-day operations. Main, Wright, F. Graham Thouret and Jeff Lucassen founded DGAM in 2004.
"We are focused on providing fund investors with a broad suite of investment options under one roof," Carlyle co-CEO David Rubenstein said. "With the DGAM partnership, Carlyle's Solutions platform is now positioned to offer investors the ability to allocate across alternatives in hedge funds, private equity and real estate."
"DGAM’s proven ability to create customized hedge fund portfolios complements and augments our private equity and real estate fund of funds capabilities, allowing us to offer more holistic investment solutions," Jacques Chappuis, head of Carlyle's solutions group, added. "We are pleased to welcome George Main and his team to Carlyle."
Carlyle will pay for the acquisition with equity from its balance sheet, it said.