SAN FRANCISCO (MarketWatch) — Moelis & Co. agreed to buy Gracie Credit, getting the investment bank into the $1.8 trillion hedge-fund business for the first time.
Gracie, a $2 billion credit hedge-fund firm run by Daniel Nir, will operate as a separate business within Moelis. The deal is expected to close in November. A purchase price wasn’t disclosed.
The deal is the latest in what’s turning out to be a busy year for mergers and acquisitions in the so-called alternative-investment industry, which includes hedge funds and private equity.
Man Group PLC (EMG) agreed to acquire GLG Partners earlier this year, while Credit Suisse Group AG
bought a stake in James Dinan’s York Capital Management. Read more about Credit Suisse’s stake in York Capital.
Increased regulation means some hedge-fund managers are looking for larger financial institutions to help run their businesses. Meanwhile, banks and other institutions are attracted to hedge funds because of growing interest among institutional investors and the large fees the vehicles can generate.
Investment bank Freeman & Co. said Monday that alternative-manager deals will probably outpace traditional-manager acquisitions for the first time in 2010.
The acquisition of Gracie will expand Moelis’s Asset Management platform, while Gracie will benefit from the added resources and global reach of a larger organization, Moelis said.
Nir and partners James Palmisciano, Manbir Singh, Michael Robertson and Alex Koundourakis lead a team of 30 employees at Gracie, including 18 investment professionals. The partners have worked together for the past five years. Gracie will continue to operate from its current location and expects no changes in its investment team, the firms said.
The Gracie partners have entered into long-term employment agreements with “economic incentives and other provisions” designed to keep the investment team intact and focused on Gracie’s investment mandate, Moelis said.
“This unique partnership will also enable us to retain our talented team and keep them appropriately incentivized to continue delivering strong returns to our investors for years to come,” James Palmisciano, chief investment officer of Gracie, said in a statement.
Barclays Capital, part of Barclays PLC
(BARC) , advised Gracie on the deal. Moelis advised itself.
View more information: https://www.marketwatch.com/story/moelis-buys-hedge-fund-firm-gracie-credit-2010-09-28