DES MOINES, Iowa--(BUSINESS WIRE)--Principal Global Investors, LLC, a leading global asset manager and a member of the Principal Financial Group® (NYSE:PFG), today announced an agreement to acquire a 55 percent stake in Liongate Capital Management (Liongate), a global alternative investment boutique based in London and New York focused on managing portfolios of hedge funds.
Founded in 2003, Liongate has approximately US $2.1 billion1 in assets under management across a range of commingled funds and dedicated client portfolios. Its client base includes many of the world’s leading pension funds, insurance companies and sovereign wealth funds. Liongate is recognized for its dynamic approach to asset allocation and managed hedge solutions, which have delivered strong, long-term risk-adjusted returns to its blue-chip investor base.
The transaction will strengthen The Principal’s alternative investment capabilities, deepen its pool of investment talent, and help extend its product offerings into customized multi-asset and hedge fund solutions.
“With its strong reputation and focused investment expertise, Liongate is a welcome addition to our multi-boutique investment management structure,” said Jim McCaughan, chief executive officer of Principal Global Investors. “The partnership will enhance our capabilities in alternative investments, which is an area where client demand continues to grow. Very few institutional investment firms have this level of expertise in hedge fund investing.”
Being affiliated with a global investment management leader, Liongate will benefit from access to The Principal’s global footprint and strong distribution networks, as well as its product development expertise and best-practice support infrastructure.
“Our clients increasingly want hedged solutions over their entire portfolios, and not just on an ‘alternatives’ side plate. The operational synergies and economies of scale will enhance our client resources globally, enabling Liongate to focus on consistent, risk-adjusted client performance. The Principal gets what we want to do, and our personal chemistry is strong, so that is why we decided to work together,” said Randall Dillard, chief investment officer and co-founder of Liongate.
The Liongate partners will retain a 45 percent share and will manage Liongate within their current roles. The partners are reinvesting a significant share of their consideration into existing Liongate investment strategies.
The transaction is expected to close in the second quarter of 2013, pending regulatory approval. The Principal estimates the acquisition will be slightly accretive in the first year. Sandler O'Neill + Partners advised The Principal on the transaction and Fenchurch Advisory Partners advised Liongate.
For more news and insights from the Principal Financial Group, connect with us on Twitter at: http://twitter.com/ThePrincipal.
Forward looking and cautionary statements
This press release contains forward-looking statements, including, without limitation, statements as to operating earnings, net income available to common stockholders, net cash flows, realized and unrealized gains and losses, capital and liquidity positions, sales and earnings trends, and management's beliefs, expectations, goals and opinions. The company does not undertake to update these statements, which are based on a number of assumptions concerning future conditions that may ultimately prove to be inaccurate. Future events and their effects on the company may not be those anticipated, and actual results may differ materially from the results anticipated in these forward-looking statements. The risks, uncertainties and factors that could cause or contribute to such material differences are discussed in the company's annual report on Form 10-K for the year ended Dec. 31, 2012, filed by the company with the Securities and Exchange Commission, as updated or supplemented from time to time in subsequent filings. These risks and uncertainties include, without limitation: adverse capital and credit market conditions may significantly affect the company’s ability to meet liquidity needs, access to capital and cost of capital; continued difficult conditions in the global capital markets and the economy generally; continued volatility or further declines in the equity markets; changes in interest rates or credit spreads; the company’s investment portfolio is subject to several risks that may diminish the value of its invested assets and the investment returns credited to customers; the company’s valuation of securities may include methodologies, estimations and assumptions that are subject to differing interpretations; the determination of the amount of allowances and impairments taken on the company’s investments requires estimations and assumptions that are subject to differing interpretations; gross unrealized losses may be realized or result in future impairments; competition from companies that may have greater financial resources, broader arrays of products, higher ratings and stronger financial performance; a downgrade in the company’s financial strength or credit ratings; inability to attract and retain sales representatives and develop new distribution sources; international business risks; the company’s actual experience could differ significantly from its pricing and reserving assumptions; the company’s ability to pay stockholder dividends and meet its obligations may be constrained by the limitations on dividends or distributions Iowa insurance laws impose on Principal Life; the pattern of amortizing the company’s DPAC and other actuarial balances on its universal life-type insurance contracts, participating life insurance policies and certain investment contracts may change; the company may need to fund deficiencies in its “Closed Block” assets that support participating ordinary life insurance policies that had a dividend scale in force at the time of Principal Life’s 1998 conversion into a stock life insurance company; the company’s reinsurers could default on their obligations or increase their rates; risks arising from acquisitions of businesses; changes in laws, regulations or accounting standards; a computer system failure or security breach could disrupt the company’s business, and damage its reputation; results of litigation and regulatory investigations; from time to time the company may become subject to tax audits, tax litigation or similar proceedings, and as a result it may owe additional taxes, interest and penalties in amounts that may be material; fluctuations in foreign currency exchange rates; and applicable laws and the company’s certificate of incorporation and by-laws may discourage takeovers and business combinations that some stockholders might consider in their best interests.
About Principal Global Investors
Principal Global Investors is a diversified asset management organization and a member of the Principal Financial Group®, with expertise in equities, fixed income and real estate investments, as well as specialized overlay and advisory services. Principal Global Investors manages $281.5 billion in assets2 primarily for retirement plans and other institutional clients3.
About Liongate Capital Management
Based in London and New York, Liongate is a global alternative investment management and research firm focused on creating and managing portfolios of hedge funds. Liongate manages approximately US $2.1 billion in commingled funds of hedge funds, managed accounts and customized investment portfolios for institutional and private investors.
About the Principal Financial Group
The Principal Financial Group® (The Principal ®)4 is a global investment management leader offering retirement services, insurance solutions and asset management. The Principal offers businesses, individuals and institutional clients a wide range of financial products and services, including retirement, asset management and insurance through its diverse family of financial services companies. Founded in 1879 and a member of the FORTUNE 500®, the Principal Financial Group has $403.0 billion in assets under management5 and serves some 18.3 million customers worldwide from offices in Asia, Australia, Europe, Latin America and the United States. Principal Financial Group, Inc. is traded on the New York Stock Exchange under the ticker symbol PFG. For more information, visit www.principal.com.
1 As of Jan. 1, 2013
2 As of Dec. 31, 2012
3 Principal Global Investors is the asset management arm of the Principal Financial Group ® (The Principal ®) and includes the asset management operations of the following subsidiaries of The Principal: Principal Global Investors, LLC; Principal Real Estate Investors, LLC; Principal Enterprise Capital, LLC; Spectrum Asset Management, Inc.; Post Advisory Group, LLC; Columbus Circle Investors; Edge Asset Management, Inc.; Morley Financial Services Inc.; Finisterre Capital, LLP; Origin Asset Management, LLP; Principal Global Investors (Europe) Limited; Principal Global Investors (Singapore) Ltd.; Principal Global Investors (Australia) Ltd.; Principal Global Investors (Japan) Ltd.; Principal Global Investors (Hong Kong) Ltd.; CIMB-Principal Islamic Asset Management Sdn. Bhd.; and the majority owned affiliates of Principal International, Inc. Assets under management includes assets managed by investment professionals of Principal Global Investors under dual employee arrangements with other subsidiaries of The Principal and assets managed in accordance with investment advice provided by Principal Global Investors through the delivery of a model.
4 “The Principal Financial Group” and “The Principal” are registered service marks of Principal Financial Services, Inc., a member of the Principal Financial Group.
5 As of Dec.31, 2012