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Demand for Alternative Investments Stimulates Strong Interest in Acquisitions, Says Putnam Lovell NBF, Leading M&A Adviser on Hedge Fund Transactions

NEW YORK, January 25, 2006 – Acquisitions of fund of hedge fund managers (FoHFs) and single- and multi-strategy hedge fund specialists are on the rise, fueled by the strategic needs of large financial institutions to meet growing client demands for alternative investment products, according to Putnam Lovell NBF Securities Inc., the leading adviser on hedge fund transactions.

The pace of M&A activity in the hedge fund area and the level of involvement by large financial institutions have intensified in recent months, according to New York-based Putnam Lovell NBF, an investment bank serving the global financial services community. Two transactions have been announced so far this month – the acquisition of International Asset Management by ABN AMRO Asset Management and the purchase of Austin Capital Management by KeyCorp’s investment management arm. Two other deals were announced in December 2005 – Bank of Ireland’s acquisition of a majority interest in Guggenheim Alternative Asset Management, and the sale of a majority interest in Harcourt Investment Consulting to Vontobel Group.

According to Putnam Lovell NBF, an adviser on three of the four most recent deals, twenty transactions involving FoHFs and hedge funds were announced in 2005 and 22 deals in 2004. In total, there were 128 asset management transactions announced in 2005 and 155 in 2004.

"We are seeing an unprecedented level of interest by financial institutions seeking to extend their investment capabilities to the alternatives arena, and especially hedge funds,’’ said John B. Griff, President of Putnam Lovell NBF. ``Rapid acceptance of hedge fund products as a critical part of a diversified investment portfolio has powered this surge. Financial institutions are recognizing that without credible capabilities in this area, they will fall behind the competition."

Putnam Lovell NBF, whose investment banking practice represents a varied group of prominent global clients consisting of diversified financial services companies, institutional, mutual fund and wealth managers, alternative investment managers, banks, insurance companies, broker-dealers, and financial technology firms, has advised on eighteen transactions involving FoHFs, hedge fund managers and hedge fund administrators since 1999, more than any other investment bank.

Putnam Lovell NBF has advised on some of the most significant deals to date, including, recently:

  • International Asset Management in its announced sale to ABN AMRO Asset Management. Announced in January 2006.
  • Bank of Ireland in its announced acquisition of a majority interest in Guggenheim Alternative Asset Management. Announced in December 2005.
  • Harcourt Investment Consulting’s sale of a majority interest to Vontobel Group. Announced in December 2005.
  • Coast Asset Management’s sale of an equity interest to Summit Partners. Announced in August 2005.
  • Derivatives Portfolio Management in its sale to Mellon Financial. Announced in January 2005.
  • AQR Capital Management’s sale of a minority interest to Affiliated Managers Group. Announced in November 2004.
  • Deerfield & Co. in its sale of a majority interest to Triarc Companies. Announced in June 2004.
  • Evaluation Associates Capital Markets in its sale to Mellon Financial. Announced in June 2004.
  • Numeric Investors in the recapitalization led by TA Associates. Announced in May 2004.

Founded in 1987, Putnam Lovell NBF has been a subsidiary of National Bank Financial Inc. (NBF) since 2002. Montreal-based National Bank Financial is a leading Canadian full-service investment bank, with origins dating back to 1902. NBF has over 3,100 employees with offices and operations in Canada, Switzerland, the US, and the UK.

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