Morgan Snaps Up 19% Stake In London Hedge Fund

Nov 1 2006 | 9:57am ET

Another day, another deal. Morgan Stanley has bought a 19% stake in London-based hedge fund firm Lansdowne Partners. It is the third such deal Morgan has made with a hedge fund in as many days.

Lansdowne Partners, which was founded by Paul Ruddock and Steven Heinz in 1998, has $12 billion in assets under management. It is not known how much Morgan Stanley paid for its piece of the firm.

Owen Thomas, president of the Wall Street giant, said in a statement today that the investment fits well with Morgan Stanley’s long-term growth strategy.

While Morgan Stanley may be on a hedge fund shopping spree, the firm’s alternatives unit, which manages approximately $76 billion, is still small potatoes compared to those of its rivals, JPMorgan Chase, Goldman Sachs and Lehman Brothers – something Chief Executive Officer John Mack has repeatedly said he intends to change. 

Yesterday Morgan Stanley agreed to buy Conn.-based FrontPoint Partners for approximately $400 million. And on Monday the firm bought an 18% stake in New York-based Avenue Capital Group for almost $280 million.

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